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So how much disability insurance do you need? As you know disability insurance is insuring
your income, so if you are unable to work you will still receive a check. If the disability
insurance is paid by the employer, it should be based on your gross salary as the benefits
you receive will be taxed. However, if you are paying for it yourself, the amount of
the insurance should be based on your net income as any benefits you receive will not
be taxed.
Replacing 80% or more of your income is a good rule of thumb. But what if you do not
want that much insurance or are afraid you cannot afford it? What are your options?
Well, first of all you can insure for an amount less than 80%, but be sure it's enough to
cover your bills, and remember that the disability itself may cause additional expenses, such
as if you are hospitalized you might have additional medical bills, or transportation,
or even child care bills if you are unable to take care of your children. You can also
lower the premium by lengthening the elimination period or decreasing the amount of time you
will be covered once you become disabled.
So where can you get more information? I'm glad you asked. My name is Gene Grzywacz.
I am licensed in the great state of Arizona. So if you are in Arizona and you want some
information about disability insurance, call me right now: (520) 358-2533, or visit my
website: GeneArizona.com. Thank you.