What Does Disability Insurance Pay? 
Individual Disability Insurance pays a stated benefit for a stated period according to the policy . If you have a long term disability policy with maximum benefits , it will more than likely pay the benefit to age either one of two ways : 60 % of your compensation tax free -LRB- because you did n't deduct the premiums -RRB- and 80 % of your compensation taxable because you deducted the premium . 