Case Study

Lisa Johnson, a recent college graduate, has decided to accept a job offer working for a nonprofit organization. She has been offered a starting salary of $$50,000$ a year.

The organization does not provide any health benefits for employees but does provide some disability coverage. Lisa estimates that her monthly living expenses will be about $$3,500$ a month, including rent, food, transportation, and clothing. She has no major health problems and expects to remain in good health in the near future. Lisa$$s employer contributes to a workers' compensation insurance fund that would provide $$1,250$ per month for $6$ months if Lisa were disabled and unable to work$\mathrm{.}4.$ Based on your analysis, what would you advise Lisa about the need for additional disability income insurance? Discuss the type and size of disability income insurance coverage she should consider, including possible provisions she might want to include. What other factors should she take into account if she decides to purchase a policy?

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DISABILITY BENEFIT NEEDS

Name$($s$)$ Lisa Johnson Date August $6,2024$

$1.$ Current monthly pay $

$2.$ Estimate existing monthly benefits:

a$.$ Social Security benefits $

b$.$ Other government benefits

c$.$ Company benefits $1,250\mathrm{.}00$

d$.$ Group disability policy benefits

$3.$ Total existing monthly disability benefits $(2$a $+2$b $+2$c $+2$d$)$ $$1,250\mathrm{.}00$

$4.$ Estimated monthly disability benefits needed $([1][3])$ $$2,916\mathrm{.}66$

$4.$ Based on your analysis, what would you advise Lisa about the need for additional disability income insurance? Discuss the type and size of disability income insurance coverage she should consider, including possible provisions she might want to include. What other factors should she take into account if she decides to purchase a policy?