Disability Insurance Calculator — Income Protection Coverage
Monthly Coverage Needed
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Self-Fund Period
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Recommendation
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How Disability Insurance Coverage Is Calculated
Disability insurance replaces a portion of your income if an illness or injury prevents you from working. Most policies cover 60% to 70% of your gross income, because insurers cap benefits below full salary to maintain a financial incentive to return to work. This calculator estimates your monthly coverage need by targeting 60% of your gross income and subtracting any employer-provided group disability coverage you already have, then evaluates whether your emergency fund can bridge the waiting period before benefits begin.
The elimination period (also called the waiting period) is the number of days you must be disabled before benefits start paying. Common options are 30, 60, 90, or 180 days. Choosing a longer elimination period significantly reduces your premium -- a 90-day wait typically costs 20-30% less than a 30-day wait -- but requires enough savings to cover your essential expenses during that gap. This calculator checks your emergency fund against the chosen waiting period and flags whether you would need additional savings to self-fund that interval.
When shopping for disability insurance, the two most important policy features to compare are own-occupation versus any-occupation definitions and the benefit period length. Own-occupation policies pay benefits if you cannot perform your specific profession, while any-occupation policies only pay if you cannot work any job at all. Benefit periods range from 2 years to age 65; longer periods cost more but provide substantially better protection against chronic conditions like back injuries, cancer, or autoimmune disorders that may prevent working for years.
Frequently Asked Questions
How much disability insurance do I need?
Most policies replace 60-70% of gross income. You cannot typically insure 100% of income because insurers want you motivated to return to work. If your employer provides coverage, check if it covers short-term, long-term, or both.
What is an elimination period?
The elimination period (waiting period) is the time between becoming disabled and when benefits begin. Common periods are 30, 60, 90, or 180 days. Longer periods mean lower premiums but require more savings to bridge the gap.
Own-occupation vs any-occupation?
Own-occupation policies pay if you cannot perform your specific job. Any-occupation policies only pay if you cannot work any job at all. Own-occupation provides better protection but costs more.