What is defined as 'sickness' in a disability income policy?

In a disability income policy, the term 'sickness' is specifically understood as a disease that is contracted after the policy has been active for a certain period, typically 30 days. This definition is crucial because it distinguishes between pre-existing conditions, which the policy may not cover, and new illnesses that develop after a waiting period. This waiting period serves to limit the insurer's risk and ensures that individuals cannot rapidly secure coverage for conditions that they may already be experiencing at the time of policy initiation.

In the context of insurance, the significance of this definition lies in the way it allows for coverage of new and unforeseen health issues while protecting the insurer from immediate claims related to chronic or ongoing health problems that existed prior to coverage. This condition creates a balance between providing necessary protection for insured individuals and managing the financial risk for the insurance company.