Disability Insurance Calculator
Income replacement need — how much short-term and long-term coverage.
Monthly income gap to insure privately
$4,063
Annual policy estimate: $1,219. DI typically costs 1-3% of insured income, with 90-day elimination period.
Your ability to earn an income is probably your most valuable asset — and disability insurance is what protects it. Yet most people are underinsured, relying on a thin employer policy or assuming it won’t happen to them. This calculator estimates how much income replacement you actually need.
It covers both short-term (weeks to months) and long-term (years) coverage, accounting for what your employer already provides and the gap you’d need to fill privately.
How this calculator works
Disability policies typically replace around 60% of gross income (benefits are often tax-free when you pay premiums). The calculator takes your income, applies a target replacement percentage, and subtracts any employer-provided coverage and other income sources — leaving the monthly benefit a private policy should add. It separates short-term needs (covered by savings or STD) from long-term protection.
Assumptions and data behind the estimate
Need is estimated by applying a target replacement rate (commonly around 60% of gross income, reflecting that individually-paid benefits are often tax-free) to your income, then subtracting employer coverage and other income sources. It separates short-term needs (savings or STD) from long-term protection. Actual policy pricing depends on occupation class, the benefit and elimination periods you choose, and your health.
What affects the number
- Your gross income and essential monthly expenses
- Target replacement rate (often ~60% of income)
- Existing employer short-term and long-term disability coverage
- Emergency savings (how long you could self-fund a short disability)
- Benefit period and elimination (waiting) period of the policy
- Whether premiums are paid pre- or post-tax (affects whether benefits are taxable)
Frequently asked questions
How much disability insurance do I need?
Enough to cover your essential expenses — usually around 60% of gross income, since benefits are often tax-free. Subtract any employer coverage to find the private gap. The calculator gives you a monthly benefit target.
Isn’t my employer’s disability coverage enough?
Often not. Group long-term disability typically replaces ~60% and is capped, may be taxable, and ends if you leave the job. Many people need a supplemental individual policy to protect their full income.
What’s the difference between short-term and long-term disability?
Short-term covers a few weeks to months (think recovery from surgery or childbirth). Long-term picks up after that and can pay for years or to retirement. Most income-protection planning focuses on long-term coverage.
Sources and references
- U.S. Social Security Administration — disability benefits
- Council for Disability Awareness
- Insurance Information Institute — disability insurance
This calculator provides general estimates for educational purposes only and is not insurance advice or a quote. Your actual rates and coverage needs depend on your specific situation and insurer.