Phase 9 · Family & Protection
Disability Insurance Needs Calculator
Your income is your biggest asset — and likelier to stop from disability than death. Size the monthly benefit to insure, and see how fast your savings would run dry without it.
How much disability insurance do I need?
Insure the gap, not the salary: monthly gap = essential expenses − existing disability benefit. Employer coverage typically replaces only 50–60% of base pay and is taxable when the employer pays the premium, so the real shortfall is usually larger than the policy percentage suggests.
- Worked example (defaults on this page): $5,000 of monthly essentials against a $1,500 existing benefit leaves a $3,500 monthly gap — existing coverage handles just 30%.
- $20,000 of liquid savings covers that gap for 5.7 months. Most long-term disability claims last considerably longer.
- Across 25 years to retirement, the income at risk is $1,050,000 — which is why income, not property, is usually a working person’s largest uninsured asset.
- Check the definition of disability in the policy. "Own occupation" pays if you cannot do your specific job; "any occupation" pays only if you cannot do any work at all, and the price difference reflects that gap.
Under the hood
The math, fully exposed
We find the monthly shortfall, then test how long savings could cover it:
Monthly gap = essential expenses − existing disability benefit
Existing covers = existing benefit ÷ essential expenses
Savings runway = liquid savings ÷ monthly gap
Income at risk = monthly gap × 12 × years to retirement
- The gap is the policy: insure the difference between your essentials and what employer or government benefits already pay — no more, no less.
- Savings only buy time: the runway shows how long cash lasts before a long disability becomes a crisis — usually far shorter than the disability could last.
- Self-paid benefits are tax-free: a policy you fund pays out untaxed, so you can insure a smaller number than gross income suggests.
Your directives
What to do next, based on your numbers
Adjust the sliders to generate tailored recommendations.
Answers
Frequently asked questions
Why is disability insurance so important?
A working-age person is statistically much more likely to suffer a disability that stops their income than to die — roughly one in four workers will be disabled for some period before retirement. Yet your ability to earn is usually your largest asset, often worth millions over a career. Disability insurance protects that income stream when an injury or illness keeps you from working, covering the gap between what you need and what other benefits provide.
How much disability coverage do I need?
Enough to cover your essential monthly expenses minus any disability benefits you already have — employer long-term disability (LTD) and an estimate of Social Security Disability. Private policies typically max out around 60% of gross income, since benefits you pay for yourself are tax-free. This tool sizes the monthly benefit that closes the gap between your essentials and your existing coverage.
Doesn't my employer or Social Security cover this?
Often only partly. Employer LTD usually replaces about 60% of base pay, is taxable if your employer paid the premium, and disappears if you change jobs. Social Security Disability is hard to qualify for and pays modestly. Relying on them alone frequently leaves a gap below your real expenses — which is exactly the gap a supplemental private policy is meant to fill. Enter your existing benefit to see what's left.
What is an elimination period and how does it interact with savings?
The elimination period is the waiting time — often 90 days — between becoming disabled and when benefits begin. Your emergency savings have to bridge that gap, so this tool shows how many months your savings would last covering the shortfall. A longer elimination period lowers your premium but demands more savings; a shorter one costs more but starts paying sooner. This is an educational model, not financial advice.