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Disability Income Analysis

A disability income analysis is there to report and analyze termination experience and claim incidence trends. Our consultants can run the numbers for you.


Effective financial planning means being prepared for every situation- even the ones people don’t want to think about. If a person becomes disabled through illness or injury, they can find themselves unable to work or with significantly reduced earning potential. Disability income insurance is a type of policy that can help in these situations. 


Part of understanding disability income is knowing how disability income analysis works. Before taking out a policy, more information is needed to work out the amount payable. The analysis and the policy play equal parts in establishing how well-covered a person is should they ever face this situation. 

What Is Disability Income Insurance?

In short, disability income insurance is a policy taken out by an individual to protect their finances in case of future disability. It provides an alternative source of income if a person can no longer work due to the severity of their condition. When a person becomes disabled and cannot earn money through gainful employment, their disability income insurance comes into play.


Most disability income insurance policies apply to both physical and mental disability caused by injury or illness- although some may have certain terms and conditions regarding the circumstances of payout. Speaking with a financial advisor about the differences between policies and things to look out for can help you to be prepared and make the correct policy decision.


The Kelley Financial Group has years of experience in guiding businesses and individuals through complex financial matters.

What Is Disability Income Analysis?

Disability income allowance is not a set figure: it depends on varying factors. The specifics of a policy play a significant role, but the details of the person’s condition are also considered. The analysis part of disability income is about determining how much a person should receive. 


It is important to note that most income policies are not intended to replace 100% of a person’s wage pre-disability but aim for somewhere between 40% and 60% of the gross income. Disability income analysis helps determine how much the premiums should be to secure this cover and how it should be paid out. 


Some of the primary considerations in a disability income insurance analysis are:


  • Age: Older workers tend to have higher premiums and lower coverage because of increased risk to general health.

  • Occupation: High-risk jobs that can cause injury or have high rates of long-term disability in the field bring more expensive premiums.

  • Salary: The more a person earns, the more they may pay into a policy to cover the disability income payments.

  • Length of policy: Some policies are limited to a certain time frame, while others are open-ended. Premiums can change based on how long a person pays into the policy.


If a person does become disabled, the circumstances of their condition are also considered as part of the analysis. Although a disability income insurance policy will have its own stipulations, other factors come into play if a person is injured or made ill because of their work. 


Somebody injured on the worksite and can no longer perform their duties may be entitled to workers' compensation or other benefits. These alternative income sources are considered, along with the severity of the disability and how long a person is expected to be out of work. 


In some cases, the disability is permanent, meaning the policy must pay out for the duration. The fund is analyzed to decide the correct monthly or weekly amount payable- as per the policy agreement. 


If a worker is temporarily disabled, their income insurance allowance can change. The analysis process determines what they are entitled to, for how long, and when the payments should start. Again, much of this depends on the policy, which is why it is essential to discuss the options with a dedicated and experienced advisor. 

How Can a Person Get Disability Income Insurance? 

Many employers offer disability income insurance, especially in high-risk lines of work. In many cases, it is part of the annual benefits package, but it is best to check with the specific employer. A person may find the standard package is sufficient or prefer to take out additional coverage- which may also be possible through the employing company. They can pay it through an automatic reduction on payroll.


Self-employed people or anyone who feels that their employer’s coverage is not enough can choose to purchase a policy through an independent insurance company. If they have this as additional protection on top of what their employer provides, an analysis of how the two work together may be required. 


If it is the only policy, an independent evaluation is carried out by the insurance company’s elected party. These policies are most beneficial for those who cannot access company-provided protection. Small business owners can also use them to protect their employees. Again, an analysis of the premiums and payouts must be arranged. 


It is also important to remember that most states do not require employers to provide any coverage of this kind. Therefore, it may be important for workers to check whether they have any coverage. 


Lastly, some level of workers’ compensation and income protection is available through standard social security payments but only in certain circumstances.

How Can The Kelley Financial Group Help with Disability Income Analysis and Choosing a Policy?

At The Kelley Financial Group, professional financial advisors and consultants have been involved with insurance policies for years. Their deep understanding of disability income analysis and how these policies work can help concerned workers better protect themselves against the worries of disability and loss of income. 


  • Friendly advisors provide tailored and personalized service.

  • Insight into the disability income analysis process can leave people more informed and comfortable with their choices.

  • Before choosing a policy, they can advise on all available options and what they mean.

Speak To an Advisor Today

To learn more about disability income insurance and analysis in Pittsburgh, speak to The Kelley Financial Group today. Get personalized advice about the most critical decisions and help protect against financial hardship in the future.


This material was prepared for The Kelley Financial Group’s use.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision. 


This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional.

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