Coverage: You choose the level of coverage you need, usually based on a percentage of your pre-tax income. This can range from 50% to 70% of your gross income.
Waiting Period: You select a waiting period, also known as the deferred period, which is the period of time you must wait before the policy starts paying out.
Benefit Period: You choose the length of time you want the policy to pay out if you’re unable to work. Benefit periods can vary from a few years to until your planned retirement age, depending on your policy’s terms.
Premiums: You pay regular premiums to maintain the policy, typically on a monthly basis. The cost of premiums can vary depending on factors such as your age, health, occupation, and the level of coverage you choose.
Claim and Payout: If you become incapacitated and unable to work due to an accident, injury, or illness covered by the policy, you can make a claim. Once your waiting period has passed, the policy will start paying out a regular income replacement, usually on a monthly basis, until you recover or reach the end of the benefit period.