Professional pilots are generally required to maintain a First Class Medical, which generally translates to being in good health. One thing that pilots cannot have is work restrictions, or “light duty”. This means that pilots can be medically disqualified for several reasons, some large, some small.
I have had more experience than I would like with this, mostly due to orthopedic work on one of my ankles. My experiences listed below are based on the contracts at Continental and United Airlines, policies will vary from one airline to the next.
When a pilot goes out sick, there is generally a ninety day waiting period before Long Term Disability (LTD) benefits can begin. During this time, a pilot can use sick time or vacation time to cover the ninety days. This is one of the reasons that it is important to not abuse your sick time.
After ninety days, LTD benefits kick in. At my airline this is a derivative of your pay, generally $11,000 per month (was $8,000 per month until Oct. 1, 2021). This $11,000 per month is non taxable income as we pay the premium with after tax money. The LTD payments will continue until the pilot can return to work, or until the mandatory retirement age of 65. The exception to this is that benefits related to drug or alcohol abuse only last two years. During the time on LTD, the pilot is responsible for paying the full expense of medical benefits, which for me and my family is about $700 per month.
$11,000 might sound significant, and it is, but it is less than what Captains and most FOs make, so there is certainly a financial incentive to return to work.