When a person becomes disabled and is unable to work, eventually their income will stop. It could be sooner or later, but your life goes on and your daily living expenses continue to grow. Disability income insurance is available to cover at least a portion of your income while you are disabled and unable to work. It's sad, but most people pay more attention to life insurance than they do about income replacement should they become disabled.
Disability income insurance is available individually or sometimes as a portion of a group benefit provided by an employer.

Individual policies are most often sold to self-employed and professional people. The amount of your benefit relates to earnings and is matched as close to after-tax income as possible. Generally it is up to 60% of monthly net income. There is usually a maximum cap on the amount.

When included as part of your employee group benefit package, disability income policies can be more liberal than individual plans as far as limitations and exclusions. It is also much easier to acquire coverage as part of a group. Generally, group plans are far less costly to all parties.

Disability income protection should be an important element of your overall financial planning. The importance cannot be overestimated because it can protect to your overall family finances. Whatever your situation, disability will affect your ability to work and produce income.

Some things to consider when determining disability income needs are:

• Establish the bare minimum required if income stops.
• Determine your retirement needs if your ability to work ceases and you cannot invest in your retirement.
• Allow for any benefit that might be offset by social security and workers compensation.

Also consider the possibility of a "total disability." That definition is important as it is always defined in an insurance policy. Different insurance companies may use different definitions of a total disability. Interpretation is extremely important as it pertains to the insured's own occupation and any occupation the insured may be qualified to perform.

The first method used to determine a total disability concerns the occupation that the insured is normally engaged in. In this case total disability might be defined as "the insured's inability to perform any or all of the duties for his or her own occupation." This is determined by the insured's occupation at the time that disability policy begins.

The second method is more restrictive and is defined as "the insured's inability to perform the duties of any occupation for which he or she is reasonably qualified by education, training or experience." In other words, while you may no longer be able to conduct the duties of your current occupation, you may be able to perform activities in a related field or even a completely different field.

There are some disability income policies that use other criterion to classify total disability. This is called presumptive disability, and automatically qualifies the insured for total disability classification. These conditions are:

• Loss of use of any two limbs
• Total and permanent blindness
• Loss of speech and hearing

Presumptive disability may also be decided by using a loss of income test. If your earnings after you have suffered a disability significantly drop below pre-disability earnings by a given percentage, then the insured may be considered totally disabled.