Planit:Disability Insurance Calculator
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The Disability Calculator helps you to determine the total amount of insurance that the client will require in the event of a disability. The Disability Insurance Calculator illustrates the Total Capital Required compared to the client in the event that he or she become disabled and are unable to work. The calculator takes into account client’s age, percentage of earned income that will need to be replaced and the current insurance coverage.
You can use this calculator either as a freestanding tool or you can have a client already selected from the PlanPlus Planit software and load a scenario into the calculator. Either method you use the functions are the same.
Scenario: Choose the scenario either clients death/disability or spouse’s death/disability. This option is only visible if you all ready have a client selected within PlanPlus Planit.
Current Age: The age at which the scenario occurs. By default this is the current age.
Current Earned Income: The current total income of the client or spouse. By default, that is Salary, Other Taxable, and Non-taxable income from the Cash Flow screen.
Percentage Salary to Replace: The percentage of income needing replacement. This is taken from the Planning Defaults table.
Inflation: The factor representing the inflationary index. The inflation rate from the Client Information Personal screen will be used.
Keep in mind that the compounding effect of inflation will have a significant impact on the revenue stream that the insurance needs to generate over a large number of years.
After Tax Rate of Return: The estimated return on investments after taxes are paid.
Current Insurance Coverage: The amount of insurance currently held in today’s dollars.
Lump Sum Costs: Any cost associated with the scenario in a lump sum, for example you might want funds available to refurbish a home in order to provide a ramp for disability.
Lump Sum Benefits: As above, but are the benefits of the scenario. Defaults are taken from the Planning Defaults window.
Index Rate on Benefits: This allows you to input a index rate on the current disability insurance if this applies.
Other Revenues/Year: Any source of revenue such as survivor benefits on a pension. Defaults are taken from the Survivor Benefits.