What prevents an insured from earning a higher income than if he/she were working for disability income policies?

Benefit limits in disability income policies are designed to ensure that the benefits received by the insured do not exceed a certain percentage of their income prior to becoming disabled. This limit is put in place to prevent the possibility of an insured person earning a higher income while on disability than they would have if they were actively working.

The idea behind this structure is to provide financial support during a period of inability to work due to a qualifying disability, while also discouraging fraudulent claims or situations where individuals might prefer to remain on disability rather than return to work because they would receive more money. Typically, these benefit limits are set to cover only a portion of the previously earned income, often around 60-70%. Therefore, while the insured receives financial assistance during their time of need, they will always have an incentive to return to work to earn a higher income.