Disability Coverage is designed to pay out a monthly benefit to replace earnings due to a pro-longed illness, accident, or disability. Disability plans can be in the form of a group benefit from an employer, or an individual plan based on health and financial eligibility. Long-term Individual Disability Plans typically need a medical exam and verification of income, but short-term plans can bypass such requirements. Generally, disability pays 60% of earnings and is tax-free for individual plans, but taxed on group plans. Also, disability benefits normally begin after a disability has been sustained for at least one month, although some plans will payout sooner. According to the Social Security Administration, 3 out of 10 people will experience a disability that will last 3 or more months during their working years.