Based on the following information, how much individual disability insurance coverage per month would be required? ∙ Mortgage payment: $1600/month
∙ Household insurance: $100/month
∙ Car insurance: $200/month
∙ Gas and oil: $90/month ($30 commuting to and from work)
∙ Food: $200/month ($70 represents lunch at work, which would be reduced by half if the meals were prepared at home)
Employer disability insurance would provide $500/month and it is doubtful that anything would be received from either CPP or workers' compensation.

Question

Quizplus · Accepted Answer

To calculate the amount of individual disability insurance coverage required, we need to add up the monthly expenses that would need to be covered. Mortgage payment + Household insurance + Car insurance + Gas and oil + Food = $1600 + $100 + $200 + $90 + $200 - $35 (reduction due to lunch at home) = $2155. Since the employer disability insurance provides $500/month, the remaining amount that needs to be covered by individual disability insurance is $2155 - $500 = $1655. Rounded to the nearest $25, this equals $1625 per month in individual disability insurance coverage. Therefore, the answer is D) $1625.

Based on the Following Information, How Much Individual Disability Insurance