Suze Orman in her discussion printed in the Milwaukee Journal Sentinel had this to say about one person’s question on disabiity insurance:

“Q: regina of oconomowoc – how do you know if you will need long term disability insurance? I currently am 43, am the breadwinner in the family, and have 3 kids. Also my income is about $190,000 year + company stock. We have no debt other than our home.

A: Suze Orman - If you lose your job bcs of disability do you have enough money to pay the bills? If you do then you don’t need long term disability insurance. If you don’t have enough to pay your bills than you do need more. That says it pretty clearly.  If you don’t have enough savings to pay your bills then you need long term disability insurance.” 

How much is enough savings?  Well, to oversimplify, take your bills times the rest of your working life and that’s the principal amount you’ll need.  It’s probably more than you think.  Most people, unless they’ve planned well and are near retirement don’t have enough and will deplete their savings fast. Here’s an example:  $100,000 income, age 40, bills of $50,000 per year.  Savings of $200,000. 

Even with interest earnings, savings will be depleted in the 5th year.  Then what? That’s why disability insurance is so vital.  If not, where will the income come from?

Entrepreneur magazine online has a helpful article on the different types of insurance recommended for the small business owner.

Of particlular note is what is said about disability insurance:  Because you are your business’s most vital asset, many experts recommend buying disability insurance for yourself and key employees from day one.

The article goes on to discuss an often overlooked type of disability insurance that covers expenses of the business called disability overhead expense insurance which is available through the protectyourincome.com site.