We do have optional short term disability. I am covered, and most pilots seem to as well (it's a couple hundo per year). But it only pays 50% (yes, that is common and expected), and it only goes 6 months. There is then long-term disability, which is more expensive. That would be used to cover months 6-12. And as someone else mentioned, if you work another job, the benefits are reduced -- you won't earn more than 50% of your airline salary unless you have a job that pays more than that, at which point all disability would cease to pay out, under most plans at least.

Someday I'll have savings to absorb a 50% pay cut; I don't at this time. I suspect some others don't as well. So it just seems that a "loss of medical" plan would be more useful if it kicked in right away, when someone needs coverage the most. Yes that would probably affect disability benefits (they often reduce if you're multi-covered), but even a few-month period of coverage at close to original salary would help the vast majority of medically-challenged pilots bridge the gap till the FAA gives them back their medical (it was four months when it happened to me). In any event, after a year, I would hope that I wasn't still living off of 50% disability coverage. The loss of medical insurance is more of a "beyond one year" extension of short- and long-term disability, it seems. And like those plans, it doesn't pay anywhere near your original salary. So realistically, after a few weeks/months, most folks are going to have a new job or be in school, etc. I suspect, at which point the coverage wouldn't do a lot of good, depending on the details of the plan (i.e. if it reduces when you earn outside income, as most seem to do).

Might be good for some folks, of course.