The Social Security Administration estimates that more than a quarter of all 20-year-olds will become disabled before reaching retirement age. Disability insurance is designed to protect you from income loss when a covered condition prevents you from working.

If you fell and broke your arm, accident insurance might provide a one-time cash payment to help with co-pays you incur for immediate treatment. But if your broken arm kept you from doing your construction job, you might need to file a claim for short-term disability benefits to replace your income on a weekly basis. While there is a distinct difference between these two types of insurance, they can certainly complement each other in case of a covered injury.

Disability insurance is available through both private insurers and the Social Security system. Premiums vary depending on a plan’s terms and conditions but typically cost 1-3% of a policyholder’s annual income.

You should take note of these factors when considering a disability insurance policy:

• The elimination period, or the length of time a policyholder must wait after becoming disabled before they can begin receiving benefits
• The benefit period, or how long payments will be made under the plan
• The strictness of the policy’s definition of “disability”: Social Security, for instance, requires you to demonstrate that your disability is expected to last at least 12 months or is expected to result in death.