Find out how much monthly income you would have if illness or injury kept you from working. Enter your pay, any employer coverage and your elimination period to see the benefit gap, how much individual coverage you could add and how much savings the waiting period needs.
Last updated:
Income and need
$
Base my need on
%
60–70% of gross pay is a common target.
$
Existing coverage
% of pay
0 if your employer offers none.
$
Leave 0 for no cap.
%
$
e.g. an individual policy you already own.
Waiting period
$
% of pay
Total benefits from all policies are usually capped around 60–70% of income.
Enter your values to see the result.
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How to use the Disability Insurance Calculator
Enter your gross annual income and choose how to set your need.
Add your employer's long-term disability plan: the % of pay, monthly cap and who pays the premium.
Add any other disability income such as an existing individual policy.
Choose an elimination period and enter your emergency savings.
Read the monthly benefit gap and the suggested individual policy amount.
How the disability coverage gap is calculated
Need = gross monthly pay × replacement % (or essential expenses) Gap = need − (group benefit after tax + other disability income)
Example: on $75,000 a year ($6,250 a month) with a 60% target, the need is $3,750 a month. An employer plan paying 50% of pay ($3,125, under a $5,000 cap) with the premium paid by the employer is taxable; at an 18% tax rate it is worth about $2,563. The gap is about $1,188 a month. With a 90-day elimination period, you would also need about $11,100 of savings to cover the first three months.
Group vs individual disability insurance
Feature
Typical group (employer) LTD
Typical individual LTD
Benefit
50–60% of base salary, often with a monthly cap
Chosen amount within the insurer's income limit
Taxes on benefits
Taxable if the employer pays the premium
Usually tax-free (premium paid with after-tax money)
Portability
Usually ends when you leave the job
Stays with you
Definition of disability
Often switches from own occupation to any occupation after 2 years
Own-occupation coverage available
Bonuses and commissions
Often excluded
Can usually be included
Tips for choosing coverage
Match the elimination period to your savings. If you have six months of expenses saved, a 180-day period can cut the premium.
Check the benefit period. Coverage to age 65 or 67 protects against long disabilities; a 2- or 5-year benefit costs less but protects less.
Look for a cost-of-living rider if you are young, since a long claim loses value to inflation.
Read the offset rules. Many group plans subtract Social Security or workers' compensation benefits from what they pay.
Frequently asked questions
How much disability insurance do I need?
A common target is enough to replace 60% to 70% of your gross income, or at least enough to pay essential expenses. Subtract what existing coverage pays after tax; the remainder is the gap an individual policy could fill.
Are disability insurance benefits taxable?
In the US, if your employer pays the premium with pre-tax dollars, the benefits are generally taxable income. If you pay the premium with after-tax money, as with most individual policies, benefits are generally tax-free. That is why the calculator reduces taxable group benefits by your tax rate.
What is an elimination period?
It is the waiting time between the start of a disability and the first benefit payment, like a deductible measured in days. 90 days is common for long-term disability policies. A longer period lowers the premium but means more months paid from savings.
Why can't I insure 100% of my income?
Insurers limit total benefits from all sources, typically to around 60% to 70% of gross income, so that people are not better off financially by not working. The calculator flags when your gap exceeds a typical limit.
How much does disability insurance cost?
Individual long-term disability coverage commonly costs roughly 1% to 3% of annual income, depending on age, health, occupation, benefit period and riders such as own-occupation or cost-of-living adjustments. Always compare actual quotes.
Should I count Social Security Disability Insurance?
SSDI has a strict definition of disability and a five-month waiting period, so many planners don't rely on it. Group policies often reduce their payments by any SSDI you receive. Add an SSDI estimate under other income only if you want to test that case.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.