How to assess how much disability insurance you need this year

Your ability to earn an income may be your most important asset for one simple reason: it supports all of your other assets—your home, your car, and other property or investments, for example. Even if your income stops, the bills likely won’t. Disability insurance can help you protect your paycheck so you can stay on top of these bills if you are unable to work due to a covered disability.

It’s important to take a look at your disability coverage each year to make sure your coverage still fits where you are in life. Whether you are a recent grad starting your first job, a newlywed, a first-time parent, or a new homeowner, a change in your stage of life often means a change in your monthly spending habits. When evaluating how much disability insurance you need, you will want to consider how your monthly expenses—for essential items versus nice-to-have items—stack up against your income.

Here are the types of recurring bills that you may need to account for. Having the right amount of disability insurance can help ensure that you can continue to make these important monthly payments without having to worry.


Debt payments—including school loans, credit cards, and other bank loans—are usually taken out of your bank account each month.

Mortgage payments

Purchasing a home is perhaps the most significant financial undertaking you make in your life and comes with monthly mortgage payments, taxes, and utility bills.

Medical expenses

If you are out of work due to a covered disability, you might be facing new medical bills, prescription drug costs, and copayments.

Car payments

Owning a car means you are responsible for monthly car payments, auto insurance, and repair costs.

Raising a family

If you are beginning or growing your family, you may be paying for tuition, groceries, clothing, diapers, swim lessons, and daycare costs.

Use the What’s your monthly budget? worksheet to examine your overall spending and how much you are saving. This can help you decide how much disability coverage you may need to protect you and your family should you become disabled. Continue to revisit this worksheet as your needs change, so that you can be sure your paycheck is protected.  

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SLPC 25838 06/16

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