Disability insurance insures the beneficiary for the event that a disability prevents them from working. That can include psychological disorders, a physical injury, illness or other condition that impacts your ability to work. It can include paid sick leave, short term disability and long term disability.
Prior to determining how much disability insurance you need, you should find out how much is available to you. Insurance companies limit how much disability insurance can be claimed based upon an individuals income. The insurance is designed so it’s not a more attractive proposition to getting back to work.
The level of insurance available is reliant upon profession, current income and any other insurance you already have. Most workers can obtain up to 60% of their gross income, but the larger your income the lower the percentage. So if you earn $300’000 per year, you might be able to obtain as little as 40%.
You should consider the kinds of expenses you will need to pay for while you are unable to work. There are the usual expenses that most people have including food bills, utilities and so on. Then you have rent or your mortgage and other insurance premiums to think about, as well as your savings. You need to find an insurance provider that has disability insurance rates capable of providing that level of payout.
You might need to consider a number of insurance providers to get one that has reasonable insurance premiums and a sufficient payout percentage to cover all of your various expenses. Luckily there are a number of comparison sites on the Internet and disability insurance discussion forums to obtain that information from.
It is also important to consider that some professions are more likely to require disability insurance. For example if you work as a police office or a fireman, you are more likely to run into on the job hazards that could injure you. If you are in a profession that runs a great risk of on the job injury, you need to make sure you have a great disability insurance policy.