What factor determines the maximum disability income benefit that can be purchased by an applicant?

The maximum disability income benefit that an applicant can purchase is primarily determined by the applicant's income. Insurers assess an individual's current income to calculate the percentage of that income they are willing to insure. This is often positioned to replace a certain percentage of the applicant's pre-disability income, usually around 60% to 80%, to ensure that the insured can maintain a reasonable standard of living in the event of a disability.

For example, if an individual earns a high salary, they may qualify for a higher maximum benefit compared to someone with a lower income. This income-based approach reflects the notion that the purpose of disability insurance is to protect the financial wellbeing of the policyholder in line with their current earnings, thereby making income a critical factor in determining eligibility for different levels of coverage.

Other factors, such as age and health, may influence the underwriting process and premium pricing, but they do not directly set the maximum benefit cap. While a younger applicant might see lower premiums or may have different health considerations affecting their insurability, these factors do not establish the maximum limit of benefits available against their income. Similarly, credit scores are generally irrelevant to disability income benefits, as they do not provide a measure of the applicant's capacity to pay for coverage or