As a small business owner, you may want to consider offering disability insurance to your employees should they become ill and unable to work.

Disability income insurance is intended to replace a significant portion of an insured's earned income through periodic indemnity payments while the insured is disabled from sickness or injury. Disability income benefits provide monthly or weekly payments of a specified sum during a period of disability stated in the policy.

There are two types of disability insurance.

• Short-term disability covers a portion of the policyholder's salary for a short period, typically from three to six months following a disability. The specific time period and percentage of replaced income vary with different policies.
• Long-term disability coverage typically begins after the policyholder is disabled and unable to work for at least six months. It can extend for a specified number of years or until the insured retires or reaches the age of 65, depending on the policy selected.

Some points to check are:

• What is the definition of disability? Does it cover both injury and sickness? Is it for partial or total disability? Is it defined as inability to perform your current occupation or as inability to perform any occupation of which you are capable?
• When does coverage begin? Is it different for injury and sickness?
• How long will benefits be paid? What is the weekly or monthly benefit?
• How much of your income will be replaced?
• What does it cost?
• Is it guaranteed renewable?

Disability income policies may specify that income benefits will not be paid to a disabled person if the disability results from certain causes. Check the policy for any exclusions or limitations that might apply. If you have any questions, ask your agent.