Buying Insurance

Lesson 7: Disability Insurance

Exercises Lesson 7

l. Add up all of your "mandatory" monthly payments. Include things like rent, or mortgage payments, car payments, cost of groceries, credit card payments and utility bills. Skip items like entertainment, non food item expenses, savings, contributions to retirement plans. In other words, try to boil it down the "must pay" items.

Take this total and divide it by our monthly take home pay. This will give you the percentage of your income that would have to be replaced if you were out of work due to a disability. Here are some question for you to ask yourself:

Are you covered under Workmens Compensation insurance?

Do you and your family have health insurance?

Using the figures arrived at above, how long would your current savings last?

Is there a disability income component to your Group Insurance at work? How long do payments last?

If your spouse is employed, could the family get along for 6 months or more on one income? To age 65 on one income?

If you answered "no" or "not long" to three of the five questions above, you might want to explore getting some personal disability insurance.

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