Disability Insurance Calculator
Estimate the monthly disability benefit you need.
Default 60%
e.g. existing coverage
Results update as you type.
This calculator is for illustrative purposes only. Actual rates, fees and terms vary by lender. Consult a qualified financial adviser before making borrowing decisions.
How it works
Disability insurance replaces part of your income if illness or injury stops you from working, and this calculator estimates the monthly benefit you should carry. You enter your current monthly income, the percentage of it you want to replace, and any other monthly benefits you already receive or qualify for, and it returns the additional monthly benefit needed, the annual figure, and your target replacement income. Most people cannot fully insure their income; policies typically replace around 60 percent, partly because benefits from a policy you pay for with after-tax dollars are usually tax-free, so 60 percent of gross often approximates your take-home pay. Disability is more common than many realize during a working career, and unlike life insurance it protects you while you are alive but unable to earn. When estimating, account for employer group coverage and any government disability benefits, which reduce the private coverage you need to buy. Key policy features to weigh include the elimination period before benefits begin, the benefit period (how long payments last), and whether the definition of disability is own-occupation or any-occupation. This is an estimate; consult a licensed advisor for a policy suited to your work and finances. Enter your income and other benefits to estimate your needs.
Benefit needed = (income × replacement %) − other benefits
The target replacement income is your monthly income times the percentage you want to replace, commonly around 60 percent since disability benefits are often tax-free. Subtracting any other monthly benefits you already have, such as employer or government coverage, gives the additional monthly benefit your policy should provide.
Source:Income protection planning
We review all our tools from time to time to ensure accuracy.
Worked example
How to use this calculator
- 1
Enter your values
Enter monthly income.
- 2
Adjust the options
Adjust income to replace and other monthly benefits if they apply — sensible defaults are already set.
- 3
Read your result
Monthly benefit needed updates instantly as you type — no button to press.
Frequently asked questions
How much disability insurance do I need?
Aim to replace enough of your income to cover essential expenses if you cannot work. A common target is about 60 percent of gross monthly income, since privately paid benefits are usually tax-free and roughly match take-home pay. Subtract any employer or government benefits you already have to find the additional private coverage to buy.
Why replace only about 60 percent of income?
Insurers typically cap coverage below 100 percent to keep an incentive to return to work and because benefits from a policy you pay for with after-tax dollars are generally tax-free. So 60 percent of gross income often approximates your normal take-home pay. If your employer pays the premiums, benefits may be taxable, changing the percentage you need.
What is an elimination period?
The elimination period is the waiting time between becoming disabled and when benefits start paying, similar to a deductible measured in days. Common periods are 30, 60, or 90 days. A longer elimination period lowers the premium but means you must cover expenses from savings longer, so match it to your emergency fund and cash flow.
What is own-occupation coverage?
Own-occupation coverage pays benefits if you cannot perform the duties of your specific job, even if you could work in another field. Any-occupation coverage only pays if you cannot work in any suitable job, making it stricter and cheaper. Own-occupation offers stronger protection, especially for specialized or high-earning professionals, but costs more.
Does Social Security cover disability?
In the US, Social Security Disability Insurance can provide benefits, but it has strict eligibility, covers only total long-term disability, and pays modest amounts that may not replace much of your income. Employer short-term and long-term disability plans help too. Because these often fall short, many people add a private policy to close the gap.