This type of insurance should be tailored to suit your needs. A disability insurance policy provides a portion of your regular income when an accident or illness stops you from working. You could have disability insurance through your employment. Usually a disability policy covers 60% of your regular earnings.

Workers' Compensation is a form of disability insurance designed to ensure that employees who are disabled or injured on the job, are provided with fixed monetary awards. This coverage provides benefits for dependents of those workers who are killed because of work-related accidents or illnesses. Worker's Compensation can also protect employers and fellow workers, by limiting the amount an injured employee can recover from an employer, which eliminates the liability of co-workers in most accidents.

If you are a sole proprietor or have a business partner who do not have group plan coverage, then likely both of you are very important in keeping the business up and running. Not only would your business suffer if one of you was unable to perform your usual function, but personal income could be affected. You may still have business expenses that have to be paid, without the income coming in to cover the cost.

When considering what type of disability policy will work best, you need to know about the waiting period - usually 30, 60 and 90 days before the benefits will start, and whether or not you want short or longer term.

You can also buy disability insurance and/or life insurance, when you are purchasing a vehicle or large piece of equipment. This is a policy set up to cover a set amount to protect you if you are disabled, and unable to make your payments. This can be expensive when you add up all the items for which you have purchased creditor insurance. You likely would not want to burden your family with this debt load that you cannot pay, but you need to consider the whole picture - how much are you paying?

Talk to your agent or broker, about how best to address your specific needs in the most cost effective manner possible.