Disability Insurance Articles

Talking With Your Family About Disability Insurance Coverage

2010-11-29

Disability insurance coverage is something that every family needs. Even if you think the chances of getting injured on the job are slim, you should consider that disability insurance coverage will help you if you are in an accident or if you develop a chronic or acute illness. When you are talking to your family about getting disability insurance coverage, you will need to be open about your family finances.

Sit down with your spouse or partner with the intention of going over your family finances. Cover your income and expenses as well as assets you have amassed and debts you owe. Once you have discussed where your family finances are, then you can begin to discuss disability insurance coverage.

The cost of disability insurance will depend on a number of factors, including the type of job you have and length of commute you make daily to work. Employer-sponsored disability coverage does not consider these factors and may be far less expensive for you to get.

When deciding how much disability insurance coverage you will need, one important factor to consider is how much your family will need if you die. While many people feel that discussion is morbid, having the talk with your financial picture laid out in front of you will make the conversation feel more about taking care of business using factual information.

What you need to decide is which spouse makes less money and how much the difference is between that spouse's income and the family's expenses. So, for example, if you make $40,000 a year, and your wife makes $35,000 a year, will her salary cover the bills if you can no longer work? If not, which is the case with most families, then you need to prepare to make up that difference at least while your children are living at home.

Let's say that you need $45,000 to survive. Then your wife will need $10,000 a year multiplied by the number of years you consider appropriate. You would need $5,000 a year times that number of years.

Another issue to consider when choosing the amount of disability insurance coverage to select is that the non-disabled spouse will have to take care of the health needs of the disabled spouse. The result may be that you will need to hire someone for housework or to handle other tasks, and you should try to pay more for insurance premiums to get the extra space in your budget for these costs should they arise.

Looking into disability insurance coverage is difficult for many people, but being responsible about your family finances means that you should take this task seriously.