How to Insure Your Income: Lower Benefit Levels

Another way insurers can lower total claims payments is reducing benefit amounts. Limits on the amount of disability income that a person can purchase traditionally ranged between 60 percent and 75 percent of pre-disability gross earned income. However, a person earning $300,000 or more may have unearned income -- interest, dividends, etc. -- that would offset earned income loss. This person may well have a high net worth, too, and simply may not need a large amount of disability income insurance. He or she could self-insure.

High issue and participation limits offered by insurance companies probably are being replaced with lower, more meaningful benefit amounts -- based on a person's total financial picture.