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How Much Disability Insurance Do I Need?

When considering a new insurance policy of any type, one of the first questions we ask ourselves is "how much do we need?" We want to have good coverage, but we don't want to overpay by getting insurance we don't need.

With disability insurance there is a simple equation that you can use to give you a good idea of what you need. You start with your monthly take home pay. Then you subtract from it the money you save each month. You subtract from that number the amount of money you waste each month. The answer you get is the minimum amount of money that you need replaced to maintain your present lifestyle.

The equation above doesn't account for everything. If you won't receive your benefits on a tax free basis, you will need to account for that. If you will need additional health care services, you may need more money when you are disabled, than you do now when you are working. You may want to request a little more in benefits so that you can continue to contribute to a fund for your retirement days.

Any benefits you receive from Social Security may reduce the amount you need. However, it usually takes over two years before disabled persons start receiving income from the program. Also many disabled people never qualify or only qualify for paltry sums. State programs have similar problems.

One major factor to consider is inflation. Make sure that your plan has an inflation rider. You want to make sure that your monthly claim check has the same spending power year after year. Many people who file disability claims are unable to work for years. They often find that their plans pay them much less than what they need to keep up with current costs.

Many employers provide this coverage to their workers as part of their group benefit package. Many companies offer it on good terms, but only if you pay the premiums. Others do not do not offer this benefit at all. Whether or not your job offers this coverage, you probably need.

Whether you own your own business or are an employee, it is up to you as an individual to make sure that you get the information and coverage you need. You may need to invest some time looking into rates from the top insurers offering this coverage to individuals.

Disability income policies protect families from financial disaster. Often what appears to be a simple injury can take a lot of time to heal. Your health insurance policy may pay your medical bills. But you may not be able to pay a mortgage or provide for your family for years if you have a long term disability.

How much disability insurance do you need? Chances are you will need something close to your current take home pay during a long term illness.

To find out more you can get a rate from different carriers as well as the other information you need to get covered by a good policy. You can get disability insurance quotes from us so that you can decide whether or not you want to buy a plan.

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