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Special guest post from Brad Elman, CLU

Your employer provides good benefits – right? Maybe, maybe not. Let’s say you’re sick or hurt and out of work for a year or so. How will you fare?

Well, most employer-sponsored disability plans pay between to 60% to 66.67% of your income if you are totally disabled. And that money is usually taxable. So you might wind up with take-home pay that’s 30% – 40% less than when you were working.

How would that impact you financially? Could you make it? If you are not sure, look at your budget starting with fixed expenses like rent or mortgage, car payments, student loans, child care, etc. Then add in non-optional but variable expenses like utilities, phone, food, etc. Lastly, add in the rest of the items that you spend money on to see what your minimum monthly expenses are. It is helpful to have several month's credit card statements, check book registers, and bank statements handy when doing this exercise. If your monthly expenses exceed your disability benefits, then you should purchase a supplemental disability insurance policy.

You will probably not be able to purchase the entire 40% shortfall, but with a good supplemental policy and a good group policy, you can sometimes get up to the equivalent of about 70% – 80% of your after-tax income.

A good insurance professional is the best person to help you fill in the gap.