Disability insurance typically covers a percentage of your wages for a set period of time after you begin receiving benefits, or pays a fixed amount each month.
If you purchase disability insurance through your workplace, ask your human resources department how they define “disability.”
When purchasing personal disability insurance, it is important to look at the definition of “disability.” Personal disability insurance policies often allow you to choose how you define “disability,” and you can upgrade to a more generous definition by purchasing a rider. The definition affects your ability to receive benefits. Common definitions of disability are “any occupation” and “occupation-limited.”
All professions
If you are unable to work in any occupation due to illness or injury, you can receive disability benefits every month. This is the most restrictive definition of disability.
For example, if a shoulder injury prevents you from performing your primary occupation, but you can perform a desk job at an equivalent wage, “any occupation” disability insurance would not pay you benefits.
Occupation
You are unable to perform the substantial and essential duties of your primary occupation. Some disability insurance policies will pay your full monthly benefit even if you are employed in another occupation. This is the most generous definition for receiving disability benefits.
Ask your disability insurance agent if an “occupation-only rider” is available and whether you can still receive benefits if you decide to take up a different occupation.