Disability insurance is first-party insurance that replaces lost income when an insured person suffers an injury or illness and is unable to work to the same standard as before the injury or illness. Usually, even for a total disability, disability insurance replaces only part of a worker’s pre-disability gross income, such as 40 to 60 percent. Further, lost income is the only benefit. Disability insurance doesn’t pay medical expenses or any other benefits relating to the disability.

I. Types...