Disability insurance will pay a portion of your income if you are unable to work for an extended period of time due to an injury or illness. There are two types of disability insurance: short-term disability insurance and long-term disability insurance. As the name implies, short-term disability insurance replaces much of your paycheck (up to 80%) for a short period of time—usually three to six months—and is often available through your employer as a free employment benefit or at low cost. And long-term disability insurance replaces some of your paycheck if you are unable to work for years or decades—sometimes until retirement. Long-term disability insurance is not often provided by employers—but you may purchase an individual policy. Because long-term disability insurance often does not pay enough to cover your expenses, some people purchase supplemental long-term disability insurance policies.

In Texas, disability insurance is regulated under both state and federal laws. Short-term disability insurance typically covers a significant portion of an individual's income, up to 80%, for a temporary period, usually between three to six months. This type of insurance is often provided by employers as a benefit, sometimes at no cost or for a low premium. Long-term disability insurance, on the other hand, offers income replacement for a more extended period, potentially lasting for years or until retirement age. Employers less frequently provide long-term disability insurance, prompting individuals to purchase their own policies. Additionally, due to the possibility that long-term disability benefits may not suffice to cover all expenses, individuals in Texas may also opt to buy supplemental long-term disability insurance policies. It's important for individuals to review the terms and coverage limits of their disability insurance policies to understand the extent of protection provided.