To help answer this question the following should be considered

q     Are you employed / self employed?

q     How much income do you earn / declare?

q     Do you have an income continuation plan or collateral benefit sources from work?

If no income continuation plan or collateral benefit, then ask yourself the following:

q     Do you earn more than $29,714.29/year or $14.28/hour? Consider optional IRB of $600/wk.

q     Do you earn more than $44,571.43 /year or $21.42/hour? Consider optional IRB of $800/wk

q     Do you earn more than $59,428.57 or $28.57/hour?  Consider optional IRB of $1000/wk

To help understand the limit of coverage that should be considered lets look at some examples and see how the different income replacement limit would be affected.

Profile 1:

Mr. Smith is an owner operator of a small business.    He has no disability plan and has gross annual income of $29,500.  His income replacement benefit would be calculated as follows:

Gross Weekly Income:  $29,500 / 52 weeks = $567.30 per week

Income Benefit:  70% of $567.30 per week = $397.11 per week as an income benefit since he has no collateral benefits

Recommendation:  Basic coverage of $400 per week is sufficient

Profile 2:

Ms. Smith is a self employed professional.  She has purchased a small disability package for herself totalling $250 per week should she become ill or disabled.  She earns a gross annual income of $75,000.  Her income replacement benefit would be calculated as follows:

Gross Weekly Income:  $75,000 / 52 weeks = $1,442.30 per week

70% of $1,442.30 per week = $1,009.61 per week.

Income Benefit: $1,009.61/wk - $250/wk collateral benefit = $759.61 per week

Recommendation:  Sell buy up option to $800 per week