Disability insurance is a type of insurance coverage that provides income replacement to individuals who are unable to work due to a disability or illness. It is designed to protect employees' financial well-being in the event they become disabled and are unable to earn their regular income. Disability insurance typically pays a percentage of the individual's pre-disability income for a specified period, helping them meet their financial obligations and maintain their standard of living during their disability.

Example: 
An employee purchases disability insurance through their employer or independently. Unfortunately, the employee is involved in an accident that results in a severe injury, rendering them unable to work for an extended period. As a result, the disability insurance policy kicks in and starts providing the employee with a monthly income replacement, covering a portion of their lost earnings. This allows the employee to meet their financial needs and focus on their recovery without facing significant financial hardship.