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Disability cover, in plain words

By SortMyCover editorial team. Last reviewed . Fact-checked by SortMyCover editorial team on . See our editorial policy.

Short answer

Disability cover pays when illness or injury stops a person from working. It comes as a lump sum, which pays only for a permanent disability, or as a monthly income. A claim is paid only if the disability meets the policy's own definition, so the definition matters. This is information, not advice.

Disability cover is about income, not death: it pays while the insured person is alive but cannot work because of illness or injury. This page explains the main kinds and the words that decide whether a claim is paid, in general terms. It does not say whether anyone has enough cover.

What are the two kinds of disability cover?

  • A lump sum. One payment, made once the disability is shown to be permanent. The lump-sum kind pays only for a permanent loss of the ability to work.
  • A monthly income. A regular payment while the person cannot work, often called income protection or an income disability benefit. Income benefits can cover a temporary or a permanent disability, and stop on recovery, on death or at the end of the policy. Income protection has its own page.

How does a policy define disability?

A claim succeeds only if the disability meets the policy's own definition. ASISA's consumer site describes the common ones:

  • Own occupation: the person cannot do their own job. This is the widest definition.
  • Own or similar occupation: the person cannot do their own job or a similar one that suits their training and experience.
  • Any occupation: the person cannot do any job at all.
  • Loss of function: some policies use a physical or functional test instead, such as the loss of a limb, sight, hearing or speech.

The definition affects both what a claim needs to show and the premium. In most cases a lump-sum claim also needs the disability to be declared permanent: no substantial recovery is expected after reasonable treatment.

What is disability cover not?

  • It is not life cover, which pays when the insured person dies.
  • It is not severe illness cover. Severe illness cover pays on the diagnosis of a listed condition, even if the person is expected to recover. Lump-sum disability cover pays only for a permanent inability to work.
  • It does not pay for everything. A benefit may exclude work-related injuries, or take payments from the Compensation Fund into account.

Does the insurer ask about health?

Usually, yes. Underwriting can mean detailed health questions and tests, or only a few questions. The insurer may offer cover with exclusions, at a higher premium, or decline. A condition that is not disclosed can lead to a claim being rejected later.

What happens before and after signing?

The FSCA's consumer guide says a person can take a policy away to read before signing, ask for the contract to be explained in plain language, and ask an adviser for proof of their qualifications and for full details of fees and commission.

After signing there is a cooling-off period. Under the Policyholder Protection Rules for long-term insurance, a new policy can be cancelled within 31 days of receiving the policy summary or the disclosure information, whichever comes later, as long as nothing has been claimed or paid and no insured event has happened. Premiums are refunded, less the cost of any cover already enjoyed.

Questions to ask an adviser about disability cover

  • Is this benefit a lump sum or a monthly income?
  • Which definition of disability does the policy use: own occupation, similar occupation, any occupation, or loss of function?
  • Does it cover a temporary disability, or only a permanent one?
  • If it pays an income, what is the waiting period, and at what age does the income stop?
  • What is excluded?
  • How are you paid if I take this policy?

Where does SortMyCover fit in?

SortMyCover does not sell cover, give advice or quote premiums. It books a 30-minute call with an adviser from an FSCA-authorised financial services provider, who can talk about cover for your situation. How to check an adviser shows how to look them up first, and what happens on a 30-minute call describes the call.

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