How to Buy Disability Income Insurance
- 1). Calculate current assets and liabilities to determine how long you could go without your current income after sick leave and vacation are used up.
- 2). Write down that number of days.
- 3). Determine how much short-term disability insurance your employer provides for you and write down that number of days.
- 4). Determine how much long-term disability insurance your employer provides for you and write down that number of days.
- 5). Add up all the days from above and convert to years.
- 6). Add those years to your age at your next birthday. For example, 5.5 years plus 32 years old equals 37.5 years.
- 7). Subtract that number of years from 65 to arrive at the approximate number of years you are at risk should you become unable to work as a result of an accident or prolonged illness. For example, 65 minus 37.5 equals 27.5 years.
- 8). Decide whether you are willing to accept that risk yourself, or whether you would prefer to transfer the risk to an insurance company, if you can qualify.
- 9). Call your employee benefits department and apply for or buy as much of the company's group coverage as you can.
- 10
Make up any difference between your company's coverage and your needs with disability income insurance from a quality disability income insurance company.
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