Disability Insurance Calculator
Find out how much monthly disability benefit you'd need to replace your income if you couldn't work.
This is an educational estimate only — actual policy benefit caps, elimination periods, and premiums vary by insurer. Get quotes from licensed insurance providers for exact pricing.
Why do you need disability insurance?
Disability insurance replaces a portion of your income if an illness or injury leaves you unable to work, whether temporarily or long-term. It's one of the most overlooked types of insurance, yet the Social Security Administration estimates that roughly 1 in 4 of today's 20-year-olds will experience a disability lasting a year or more before reaching retirement age. Unlike life insurance, which protects your family if you die, disability insurance protects your income while you're alive but unable to earn it — arguably a more likely scenario for most working adults.
Why 60% income replacement is the industry standard
Most disability insurance policies cap benefits at 60% of your pre-disability income rather than 100%, and this isn't arbitrary. Disability benefits are often received tax-free (when you pay premiums with after-tax dollars), so 60% of your gross income can come close to matching your prior after-tax take-home pay. It also preserves an incentive to return to work when medically able, which is a design feature insurers build into nearly every policy on the market.
Employer coverage often isn't enough
Many employers offer short-term disability and sometimes a baseline long-term disability benefit, but employer-provided long-term disability coverage often replaces only a portion of salary and can be capped at low monthly maximums, and benefits from employer-paid premiums are typically taxable. Many people supplement with an individual policy to close that gap. This is an educational estimate only — a licensed insurance agent can help you determine the right benefit amount, elimination period, and benefit duration for your situation.
Frequently Asked Questions
How much disability insurance coverage do I need?
Most insurers cap benefits at 60-70% of your gross monthly income, which is typically enough to closely match your after-tax take-home pay since disability benefits from individually-paid policies are usually received tax-free. Use the calculator above with your own income to see your target benefit amount.
Why can't I get disability insurance that replaces 100% of my income?
Insurers intentionally cap benefits below 100% to preserve a financial incentive to return to work once you're medically able, and to reduce fraudulent or exaggerated claims. This is standard across the industry, not specific to one insurer.
Is disability insurance benefit money taxed?
It depends on who paid the premiums. If you paid your own premiums with after-tax dollars, your benefit is typically tax-free. If your employer paid the premiums (common with basic group long-term disability), the benefit is usually taxable as income.
What's the difference between short-term and long-term disability insurance?
Short-term disability typically covers a few weeks up to about a year and often has a short waiting period, while long-term disability kicks in after that waiting period ends and can continue paying benefits for years or until retirement age, depending on the policy.
Is my employer's disability insurance enough?
Often not fully. Employer-provided long-term disability frequently replaces a lower percentage of salary than you'd want, may cap the maximum monthly benefit at a level too low for higher earners, and the benefit is usually taxable — many professionals buy a supplemental individual policy to close the gap.
What is "own occupation" disability coverage?
An "own occupation" policy pays benefits if you can't perform the specific duties of your own profession, even if you could technically work in a different field. This is considered stronger coverage than an "any occupation" policy, which only pays if you can't work in any job you're reasonably qualified for.
How likely am I to need disability insurance?
More likely than most people assume — the Social Security Administration estimates roughly one in four of today's 20-year-olds will experience a disability lasting a year or more before reaching retirement age, which is why many financial advisors consider disability insurance a core part of income protection.
What is an elimination period in disability insurance?
The elimination period is the waiting time between when your disability begins and when benefit payments start, similar to a deductible measured in time rather than dollars. Common elimination periods range from 30 to 180 days, and choosing a longer one typically lowers your premium.