Since it is possible to be disabled more than one time and disabilities can last for an extended time, disability insurance claims can be very large. Because disability insurance provides replacement income checks, disability insurance premiums are paid to insure against the risk of lost income. Medical expenses, liability, or other types of losses are not not covered under disability insurance.

Determining when a person is disabled can be very difficult. For this reason an important part of the policy is the part that specifies when the insured is considered disabled and when the disability ends. For its part, the insurance company has to try to underwrite the insurance in such a way as to prevent or discourage the insured from having a financial incentive to “retire” or prolong the disability and thus continue to receive disability payments after he or she is able to return to work.