This coverage is designed to replace a percentage of your gross income on a tax-free basis, should a sickness or illness prevent you from earning an income in your operation.

Every disability policy is different, from their definition of total disability, to the percentage that they will pay out, in the event that you become disabled.

Before you consider purchasing this type of coverage, you should know the definition of what constitutes disability. There are 3 basic definitions of this:

• Own-Occupation Disability Insurance. This is the inability to perform the material and substantial duties of your regular occupation. The insurance company will consider your occupation to be the occupation you are engaged in at the time you become disabled, and they will pay the claim even if you are working in some other capacity.
• Income Replacement Insurance. This will pay out, if due to sickness or injury, you are unable to perform the material and substantial duties of your occupation, and are not engaged in any other occupation. This definition will penalize you during the claim if you make the decision to go back to work, in any capacity.
• Gainful Occupation Coverage. This will pay out, if due to sickness or injury, you are unable to perform the material and substantial duties of your occupation, or any occupation for which you are deemed reasonably qualified by education, training, or experience.