When determining the amount of Disability Income coverage, which factor is most important?

When determining the amount of Disability Income coverage, the most important factor is the applicant's monthly income. This is because disability income insurance is designed to replace a portion of the income lost due to an inability to work resulting from a disability.

Insurers typically base the coverage amount on a percentage of the applicant's earnings, often around 60% to 80% of their pre-disability income. This calculation ensures that individuals receive a benefit that closely aligns with their financial needs, helping them to maintain their standard of living while they are unable to earn an income due to their disability.

While other factors, such as occupation, health, and previous disabilities, are important and can influence the underwriting process and the terms of the policy, they do not directly determine the primary coverage amount. The focus remains on the potential income stream that would be impacted in the event of a disability, making monthly income the most critical factor in assessing and setting the appropriate amount of coverage needed.