How it works
In Singapore, MoneySense and LIA describe the same shape:
- A monthly benefit, capped at a share of pay. MoneySense says policies pay up to 80% of average monthly salary, so it eases the loss but doesn't replace all of it.
- A deferred period first. Nothing is paid until the person has been disabled, without a break, for longer than that period.
- A benefit term. Payments can run for 5 or 10 years, or until 60 or 65.
- An end. Payments stop when the person can work again, or drop in proportion to their recovery.
The definition of disability matters most. LIA notes that some policies pay when someone can't do their usual work, and others only when they can't do any work at all. MoneySense says the definition affects the premium and differs by insurer, so it's the first line to read in the policy.
It isn't CareShield Life. That scheme pays for severe disability, measured by daily activities such as washing and dressing, whatever the person's job.
In the US, NAIC describes short-term cover that replaces part of pay for three to six months, and long-term cover that usually starts after six months and can last to retirement. It puts a typical benefit at about 60% of pre-disability earnings, says a 30-day waiting period is common, and notes that a waiver of premium is usually included.
Worked example, with made-up figures: a client earning S$6,000 a month has a policy paying 75% after a 90-day deferred period, to age 65. A back injury stops her working for 8 months. Nothing is paid for the first 3 months, then S$4,500 a month for about 5. If she goes back part-time, the wording decides whether the payment is cut or stopped.
Where it shows up in your week
It comes up whenever a family runs on one income. The CRM keeps each client's notes and review dates on their page, so the question gets picked up at the next review.
Related terms
Questions advisors ask
Sources
- MoneySense, Understanding disability income insurance: the 80% cap, benefit terms, deferred period, last updated 2 July 2026, read 27 September 2026
- LIA Singapore, Insurance terms: disability income insurance, read 27 September 2026
- CPF Board, CareShield Life: the six activities of daily living, page last updated 24 September 2026, read 27 September 2026
- NAIC, If a disability were to keep you from earning a living, how would you pay your bills? (US), 20 May 2020, read 27 September 2026