How Much Disability Insurance Should I Have?

The disability income benefit is the monthly amount of money that the insurance company will pay to you if you become totally disabled. This amount is typically limited to a maximum of 60-70% of your current monthly income. Disability benefits are received on a tax-free basis (if paid with after-tax dollars), so the entire amount is available to you for your personal and family needs. It is recommended that you start at this 60-70% level and consider reducing it if you have made strong progress with your debt and other savings programs. As your emergency fund grows, you can also consider a longer elimination period to help bring down the cost. Find more answers to frequently asked questions on Zander’s disability insurance education page.