Life and Disability Income Coverage
Income Replacement Strategies
Will we be all right? Can we stay in our home? Who pays the bills if a paycheck stops?
This is about the paycheck a family counts on to stay in their home, keep food on the table, and keep the plans they still have together. If that paycheck stops because of death, illness, or injury, those bills are still waiting. Life insurance and disability income coverage can help replace part of that income. Confirm current group certificates and individual policy terms before you act. Meet in Hauppauge or by secure video through Atlas VirtualWealth. No obligation.
If a Parent Dies
Life insurance can help a family keep the house, pay final expenses, and can help replace the paycheck. Group life through work is a start, but it may not be enough. Features vary by certificate and carrier.
If a Parent Cannot Work Due to Illness or Injury
Disability income coverage can help replace part of the paycheck while you are living. For many working families, this is the more common reason a paycheck stops.
Life Insurance Can Help After a Paycheck Stops
Life insurance provides a death benefit that can pay the mortgage and clear family debts.1 A common first look is 10 to 15 times annual income.2 Then look at the people who would still be here. Children at home need more years covered. A workplace pension that stops when one spouse dies can leave the other with less to live on. Subtract life insurance that work may provide.
| Annual Income | First Range to Consider | What That Money Is For |
|---|---|---|
| $60,000 a year | $600,000 – $900,000 | Support a household for a stretch of years, not one bill |
| $80,000 a year | $800,000 – $1.2 million | Keep housing and daily costs from forcing a rushed sale |
| $100,000 a year | $1.0 – $1.5 million | Cover income years plus debts you would rather erase |
| $125,000 a year | $1.25 – $1.9 million | Leave room for college or a surviving spouse who steps back from work |
Source. See notes 1–2. This is a hypothetical example for illustrative purposes only and does not represent the actual results of any particular financial product. Actual results will vary. This page is not an application and not an offer to bind coverage.
Four Questions You Should Ask
Does group life end or drop when you leave the job, change employers, or retire?
Learn what the certificate says before you change jobs or retire. Group life often ends or drops when work ends.
Is the beneficiary current: spouse, trustee, or an old form?
An old form can send the death benefit to the wrong person. Confirm the name on file.
If a workplace pension pays only while one person is alive, is a surviving spouse protected?
A workplace pension that stops when one spouse dies can leave the other with less to live on.
Does the policy include living benefits?
Life insurance with living benefits may also give you access to a portion of your death benefit during your lifetime if you experience a qualifying event.
Life Insurance With Living Benefits
Life insurance you don’t have to die to use.
Life insurance with living benefits may also give you access to a portion of your death benefit during your lifetime if you experience a qualifying event.3
Disability Income Coverage Can Help When You Cannot Work
Disability income coverage can help when you are living and cannot work. A back injury, heart surgery, a serious illness, or a long recovery can stop work for months or years. Group long-term disability income coverage through work is often 60 percent of salary, after a waiting period, and the benefit can be taxable if the employer paid the premium.4
Waiting Period
Short-term coverage may bridge a few months. Long-term coverage often waits 90 or 180 days.5 Ask what pays the household expenses in between.
How Much It Pays
A common target is 60 to 70 percent of income.6 If work already pays a monthly benefit, add an individual policy carefully so the two do not cancel each other out.
Own Occupation Versus Any Occupation
Some contracts pay if you cannot do your own occupation. Others pay only if you cannot do any occupation. That difference can matter.
A One-Page Household Worksheet
Print this page and write your numbers in. Use take-home pay and the bills that must be paid monthly.
| Line | What to Write Down | Your Number |
|---|---|---|
| A | Monthly take-home pay that would stop | |
| B | Monthly housing, property taxes, utilities, groceries, childcare | |
| C | Monthly health insurance if work coverage ended | |
| D | Debts you would want paid off (mortgage remainder, car, loans) | |
| E | Group life already in force (employer or association) | |
| F | Group disability income monthly benefit after tax, after the waiting period | |
| G | Monthly gap if unable to work (B + C − F) | |
| H | Life-insurance gap (years of support × 12 × A, plus D, minus E) |
Source. See footnotes 1–6. This worksheet is for organizing questions. It is not a quote and not a recommendation.
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What to Do Next
1. Learn what your group life and group disability income coverage actually pay.
2. Write the monthly gap and the life-insurance gap on this page. A range is fine.
3. Sit down one-on-one in Hauppauge or by video. Bring this worksheet to a complimentary 10-minute checkup or an Atlas VirtualWealth session.
Related Checklists and Guides
Income Replacement Strategies Checklist
Walk through group certificates, individual policies, and who depends on the paycheck.
Life Insurance Checklist
Financial Planning Checklist
Questions to Ask
Book Your Complimentary Checkup
Sit down one-on-one in Hauppauge or by video. Bring a recent pay stub and the group-benefit booklet. No obligation.
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Atlas Benefits Advisor
Christopher J. Vargas, LUTCF®
President & Chief Benefits Strategist
410 Motor Parkway, 2nd Floor, Hauppauge, NY 11788
Call (631) 389-2358 (voice only)
Text (631) 904-0901
cvargas@atlasbenefitsadvisor.com
Hours: Monday to Friday, 9:00 a.m. to 5:00 p.m.; Saturday by appointment only
Sources. 1–2 LIMRA and Life Happens, 2024 Facts About Life: Workplace Benefits (2024). 3 NAIC, Accelerated Benefits Model Regulation (#620), Model Laws, Regulations, Guidelines and Other Resources (Summer 2026). 4 U.S. Bureau of Labor Statistics, Employee Benefits in the United States, March 2024 (September 2024). 5 U.S. Bureau of Labor Statistics, National Compensation Survey Glossary of Employee Benefit Terms (2024). 6 Milliman, 2024 Individual Disability Insurance Market Survey Report (February 2025).