It is income paid to you weekly or monthly when you can’t work because of sickness or injury. The pay out provided may be stated as a percentage of income or as a set dollar amount. The policy defines how much you will be paid, how soon after you are disabled payments appear in your mailbox, and when they will cease. Benefits periods may depend on whether the disability was caused by an accident or illness. The longer the benefit period, the higher the premium will be.

There many different kinds of disability contracts. Some plans are available from your employer through its group health package and from private insurers. There are also various public sector programs including Social Security and some State Disability Insurance programs. Veterans, members of the armed forces, federal civil servants and coal miners are also covered by federally-sponsored programs.


Individual policies commonly use one of two definitions of “disability”.

One definition is that you are unable to perform your own occupation (“own-occ” policies) – the job you were doing before disability or illness. A variation on this theme is the modified “own occupation” policy that covers you for your own occupation so long as you are not gainfully employed elsewhere.

The second definition ¾ much less attractive to the purchaser ¾ defines disability in terms of your inability to perform any occupation for which you are suited by education and experience.

The distinctive between the major forms can be critically important. For example, if a surgeon loses a hand, s/he may not be able to do surgery. If s/he has an “own occupation” policy, s/he would be able to recover, even though she was able to work as a doctor in a non-surgical field. With the inability to perform any occupation, there would be no recovery, even if the surgeon could only be a tour guide