How Much Disability Insurance is Enough?

Disability insurance covers you in the case you are unable to continue working and do not know how you will pay important bills. Though disability insurance can be critically important if you do become disabled due to illness or injury, it is a very  expensive to pay for most people. Consider how much coverage you need to pick the right policy.


The biggest factor affecting how much insurance you will need to purchase is the level of responsibility you carry. The responsibility factor should be considered for not only yourself, but also for the other people in your life. For example, if you are a single parent, you may need a high amount of coverage because your children would not be able to provide for themselves if you were temporarily or permanently disabled. As the children age, though, your need for disability insurance may become lower. On the other hand, an individual who provides the lesser salary of two parents in a marriage may be able to carry a lower degree of disability insurance. If something were to happen to them, the other individual in the marriage could carry the extra financial burden.

Career & Lifestyle

The likelihood you will become disabled through illness or injury is another factor to consider. If your career, or lifestyle, exposes you to a high degree of hazards, you should carry more insurance than a person who lives a safer lifestyle. For example, factory workers need more disability coverage proportionately to their income than office workers.

Even though workers compensation assists with emergency payments in the event of a workplace accident, workers compensation is rarely sufficient in covering all needs a person or family may have. Similarly, if you know you ride a motorcycle instead of a safer vehicle, you are exposing yourself to more risk by your lifestyle alone. This should lead you to consider a higher amount of disability coverage.


The degree to which your income could be easily replaced in your life should factor heavily into your consideration for disability coverage. For example, if your family relies on your income as the sole source of support and payment for a mortgage, car payments and college loans, the loss of your income would be devastating. You should carry at least three months and more likely a year of coverage. However, if your family relies on the income of two individuals, and your income only covers an auto payment, then your income could be much more easily replaced. One month's worth of insurance may be sufficient.

Economic Considerations

The state of the economy is always a factor when purchasing disability insurance. You may purchase insurance today thinking it will cover your salary for three months if you become disabled. However, if inflation is high, you may find it only covers two months by the time you need your payments. While you cannot control or predict inflation, you can plan for the likelihood. Always pad your disability insurance limits to reflect the likely equivalent of your salary at the most future date on your insurance contract.

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