PERSONAL DISABILITY INCOME We insure our homes, our cars and our lives but most of us do not insure our most valuable asset, our ability to earn an income. Without an income, there would be no home or car to insure. Income protection is the most basic of insurance needs. It pays you.  If you owned a goose that laid golden eggs, would you insure the goose or the eggs? If you had a machine in your basement that printed money would you insure the machine or just the cash? You are that money machine.  You are the goose that supplies the golden eggs.  Most of us work to earn an income to provide the life style we want for our selves and our families. You buy life insurance to protect your family in case of premature death. You have medical insurance to make sure the providers of medical care are paid in case of a sickness or accident. Do you have income insurance to make sure you are paid in case of a sickness or accident? Where would your money come from if you couldn't work and earn an income? Your savings? Your friends? Your family? How long would that last? How much disability income should you have? Of course that depends on your personal needs. However, most of us can not live on what we make when we work, how could we survive financially without income.  If you are buying personal disability income protection, the maximum you can insure is 60-65% of your taxable income. If you are self employed deduct business expenses and deductions, the remaining taxable income is the figure to use. If you are an employee and have W2 income, then it is your W2 amount.  If you have long term disability at work through a group plan, the combined maximum is 70-75%. This figure is higher because most employer sponsored disability income plans are fully paid by the employer resulting in the benefit being income to the person on disability. You can purchase anything less than the maximum. I have clients that have just purchase monthly income to cover home mortgage and car payments. Some purchase $100's a month of benefit to insure that the contributions can continue to retirement plans. Guaranteeing your retirement plan contributions is a great idea. Group disability insures the income you are pay taxes on therefore does not insure 401k contributions. Also be aware that a group disability plan may not insure bonuses or commission income. There is no cut in stone group disability plan or benefit amount. Your coverage and the amount of monthly benefit depends on the plan and features selected. Read your contract. Disability is much like a parachute. You want to make sure it is packed BEFORE you jump into a disability. How much disability income do you need? What income do you need monthly to survive financially? How much disability income do you have now? Consider income taxes, too. The difference is the amount of protection you need. For more information choose the links on the left menu.