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

Jamie Fleischner

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!


Related Posts

Guaranteed Standard Issue Disability Insurance

Guaranteed Standard Issue Disability Insurance

The Guaranteed Standard Issue Program (GSI) Disability Insurance Program offered is a valuable program that provides income protection for medical residents and fellows without requiring medical underwriting or questions. This means that graduating residents/fellows...

When is it Time to Drop Your Disability Insurance Policy?

When is it Time to Drop Your Disability Insurance Policy?

So much is written about when and how to purchase an individual disability insurance policy. However, little has been written about when to drop the policy. When to buy. It is important to protect your income when you are dependent on your earnings. If you and/or your...

We're here to help

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!