Direct answer
Most providers recommend securing coverage for 60% to 80% of your gross monthly income, as this is typically the maximum amount insurance companies will underwrite to prevent over-insurance. It depends on your specific monthly expenses and whether the benefit will be taxed based on who pays the premiums.
Industry-standard underwriting guidelines regarding income replacement ratios and taxability of benefits. For additional information about income replacement and disability planning, see the Council for Disability Awareness.
What this means for you
Most providers recommend securing coverage for 60% to 80% of your gross monthly income, as this is typically the maximum amount insurance companies will underwrite to prevent over-insurance. It depends on your specific monthly expenses and whether the benefit will be taxed based on who pays the premiums.
FARMER STOCKMAN
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This page is informational and not a coverage guarantee or quote.
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