Disability insurance or is a critical coverage that is typically part of an overall retirement savings plan.  The amount and type of coverage is crucial and it is important to ensure that you are covered.

Disability insurance typically provides a monthly payment covering lost income due to a disability from accident or sickness. Typically a policy will cover up to 75% of monthly salary.

The definition of disability and the type of coverage varies between plans:

The base level definition is the inability to work in any type of work.

The next level up in coverage and definition of disability is the inability to work in occupation specified in the policy OR in any other reasonable occupation that matches the education and skills of the insured.

The highest level of coverage, and the most expensive, defines disability as the inability to perform the specific occupation listed in the policy.

As such it is important to define correctly the occupation of the insured and understand the level of coverage. Further some policies offer partial disability, i.e. a 25% impairment in the ability to work.