Disability Insurance: How Much is Enough?
Feb 11, 2013
jamie

jamie

11 Feb, 2013

When purchasing an individual disability insurance policy, eligibility is based on the income and participation limits with the company. This means they will look at the following:

1)      Income. If you are a business owner, this is your adjustable gross income (income minus business expenses). If you are employee, this is your salary before taxes.

2)      Group disability insurance benefits in force. If your employer is paying the premiums, these benefits are taxable which is taken into consideration.

3)      Other individual disability insurance currently in force.

4)      If you are replacing any benefits or lose any group policies. If you are replacing a policy, you must sign a document as such and sign at policy delivery that the replaced policy has been cancelled.

Now that you know your eligibility, how do you know how much to purchase? This depends on your own financial situation.

1)      What are your fixed monthly personal expenses?

2)      Is your spouse or partner working? How much income would they provide?

3)      What is the cost of the new policy?

It is important to continue to review your benefits and needs at least annually or if you have had a significant life change such as graduating medical residency, changed jobs, bought a house, had a child or had an adverse change in health.

For more information about disability insurance or to request a quote comparison, contact Set for Life Insurance today!

 

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Getting the right disability insurance can be downright confusing. At Set For Life, we’ll help you understand the options and work with you to select just the right product for you and your family. These articles will help you understand some of the complexities involved, but we’re happy to walk you through it! If you’re ready to get set, reach out for a quote today!