Disablity Insurance

Generally it is recommended for select disablity coverage that replaces about 60% of your after tax income. 

When coming to an amount that works for you and your loved ones personally, consider what monthly income would cover your monthly expenses and cost of living. This includes costs such as mortgage and car payments, groceries and child care. 

The duration of the benefits period ranges by plan selected. The most frequently selected periods are two years, five years, and to age 65. The length of benefit period affects the cost of premium. Benefits will continue to be paid during the allowed benefit period do long as you remain disabled. 

There is a waiting period for most disablity plans. This is called the elimination period. After you satisfy your plan's definition of disablity, and you are unable to work, you have an elimination period before you will receive benefits.  This period depnds on what you selected or what was selected by your employer. Typically the waiting period ranges from 90-180 days. 

The definition of disabled varies plan to plan. Some policies consider you disabled if you are unable to perform your work duties due to sickness or accidental injury.  Other plans consider you disabled if you're unable to perform work duties of any job taking into consideration your training, education and experience. Still other policies require that you are unable to earn a certain percentage of your pre-disability income because of injury or sickness regardless of your current job or educatio and training.

It is aslo important to know that many policies have exclusions and limitations. There may be certain disablities and pre-existing conditions tht are not covered.  

It depends on teh benefit amount, but the average cost of disability insurance is typically ranges between 1 and 4 percent of your annual income. You should expect to pay between 2 and 6 percent of your policy's monthly benefit amount in premium.