The Jacobs Company
How Much Disability Insurance Should I
Buy?

Generally, you should buy as much disability insurance as the insurance company will sell you. This will represent between 50-70% of your pre-disability earnings, depending on your income. If you are personally paying the disability insurance premium (using after- tax dollars), the disability benefit would be nontaxable. If you are deducting it through a corporation, the disability benefit would be taxable. However, insurance companies will usually sell you a higher benefit amount on a corporate pay policy. Buy as much disability insurance as you can qualify for, keeping in mind your needs and budget.