The mechanism behind how disability insurance works is simple. Disability insurance works to replace income lost because of injury or illness. In the event that you become injured and have to take an extended leave from your place of employment, disability insurance works to cover the amount of income you will lose. There is a myriad of different policies that can be purchased. It is in deciding which policy is right for you that the decision to purchase disability insurance can get complicated. Fortunately, understanding how the actual insurance works is much easier.

How quickly your disability insurance policy begins to work depends on your personal policy and the type of disability you have sustained. If you have suffered an injury such as a broken bone or back injury, your disability insurance will most likely begin coverage immediately. However, if you have suffered from an illness, your policy may take longer to become effective. This is because the disability insurance company needs to determine whether or not the illness suffered is severe enough to be disabling. Otherwise, policy coverage can begin anywhere from one day to two weeks after the illness or injury is sustained.

Disability insurance may also kick in retroactively, depending on the illness you have suffered. If you are pregnant, for example, and took a few days off, but then had to be hospitalized because of serious complications, your insurance may kick in retroactively and begin to cover from the first day you were ill. Another common example is that if you have a cold and need to take a few days off, and then are hospitalized for an extended period of time, your disability insurance will kick in, again, retroactively.

Exactly how your insurance will work depends on your own situation and personal policy. It is important to understand your policy and how it works, however, because whether your coverage will begin immediately or in a few weeks depends on your plan, and those few extra days could mean the difference between a paid and unpaid bill or the ability to make a house payment.