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Disability Insurance

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OK... this is a bit convoluted, so pay attention.....

In order to simulate disability you must use the "Insurance:" Window in the middle of the Capital Frame for premiums and the data entry grid area for salary and disability income.

The premium 'prem' and 'ends' parameters are used to simulate the disability annual premium and the age at which premiums would end. (normally retirement age)

As far as disability benefits are concerned, use the data entry grid..... if the benefits are taxable, then use 'additional taxable income' and if not taxable, use 'non taxable income'.

Now comes the tricky bit... in order to simulate the effect of disability insurance fully, you will have to run the program four (4) count em.... times.

1. best case, no disability, no insurance. Run the program assuming salary continues til retirement.

2. worst case, disability, no insurance. Run the program with salary eliminated.

3. disability, insurance in place. Run with no salary, but have the disability benefit (in data entry grid) replace the salary. (also, I imagine there would be no further premiums if you were collecting DI)

4. no disability, but paying disability premiums. Run with salary in place, but have premium data entered.

OK... this is probably overkill, but it is certainly simple. You would be best to have run these four cases ahead of time and print the four separate 'retirement income' plans each time. (using the 'comments' area to identify each case)

Also, when running each case, it would be most informative to smooth at the same (lowish) level each time, thus making the 4 comparisons meaningful.

And... remember some disability income qualifies for RSP deductability.

Whew!

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