Disability Insurance Calculator

Calculate your disability insurance needs based on your income, expenses, and existing coverage. Determine the right amount of income protection to safeguard your financial future.

Monthly Benefit = Monthly Income * Coverage % | Income Gap = Expenses - Other Income | Elimination Period Cost = Monthly Expenses * (Days / 30)
For $6,000 monthly income with 60% coverage and $3,500 expenses: Recommended benefit = $3,600/month, with 90-day elimination period costing $10,500

What is disability insurance and why do I need it?

Disability insurance replaces a portion of your income if you become unable to work due to illness or injury. Most people depend on their income to maintain their lifestyle, and disability insurance protects that income stream. Statistics show that 1 in 4 workers will experience a disability during their career.

How much disability insurance coverage do I need?

Most financial advisors recommend coverage of 60-70% of your gross income. This percentage accounts for the fact that disability benefits are often tax-free (if you pay premiums with after-tax dollars) and you won't have work-related expenses. The coverage should be enough to maintain your essential living expenses.

What is the difference between short-term and long-term disability insurance?

Short-term disability (STD) typically covers disabilities lasting 3-6 months with a benefit period of up to 2 years. Long-term disability (LTD) kicks in after short-term benefits end or after a longer elimination period (90-180 days) and can provide benefits until retirement age. Many people have both types for comprehensive coverage.

What is an elimination period in disability insurance?

The elimination period (also called waiting period) is the time between when you become disabled and when benefits begin. Common periods are 30, 60, 90, or 180 days. Longer elimination periods result in lower premiums because you're essentially self-insuring for that initial period.

Is disability insurance through my employer enough?

Employer-provided disability insurance is a good foundation, but it often has limitations: coverage may be capped at a specific dollar amount, benefits may be taxable, and you lose coverage if you change jobs. Individual policies offer portability, higher coverage limits, and potentially tax-free benefits.

How do my savings and emergency fund affect my disability insurance needs?

Your emergency fund can cover the elimination period and reduce your need for short-term disability coverage. Larger savings may allow you to choose a longer elimination period on long-term disability insurance, which reduces premiums. However, don't rely solely on savings—a long disability could deplete them quickly.