Permanent disablement insurance is a policy which pays a non-taxable lump sum benefit if you are unable to work as a result of an accident or illness. A payment may also be made if you are partially disabled. The disability definition is based on not being able to work in your occupation, not just any occupation that you might be able to perform. From a financial point of view, permanent disablement is an expensive way to live. Not only has your income-earning potential gone, but you remain alive with all the necessary day-to-day consumption needs and costs still required.