Disability Insurance Calculator

Most financial experts recommend replacing 60–80% of your after-tax monthly income if you become disabled. You should also factor in monthly expenses, existing employer coverage, and any Social Security Disability Income (SSDI) you may be eligible for to determine your actual coverage gap.

The elimination period — also called the waiting period — is the number of days you must be disabled before your benefits begin. Common options are 30, 60, 90, or 180 days. Choosing a longer elimination period typically lowers your monthly premium but requires more savings to cover the gap.

Short-term disability insurance typically covers disabilities lasting a few weeks to one year, with benefits starting after a short elimination period (7–30 days). Long-term disability insurance covers extended periods — often 2, 5, 10 years, or until retirement age — and kicks in after a longer waiting period, usually 90–180 days.

Employer-provided group disability coverage often replaces only 50–60% of your base salary and may not include bonuses, commissions, or overtime. It also ends when you leave your job. Many workers supplement employer coverage with an individual policy to close the gap and maintain portable protection.

SSDI is available to workers who have paid into Social Security and are no longer able to work due to a qualifying disability expected to last at least 12 months or result in death. However, SSDI approval can be a lengthy process and the average monthly benefit is modest, so it should not be your only source of income protection.

Whether disability benefits are taxed depends on how premiums were paid. If your employer paid the premiums pre-tax, benefits are generally taxable. If you paid premiums with after-tax dollars through an individual policy, benefits are typically tax-free. This calculator uses an estimated tax rate of 28% by default, which you can adjust.

Disability insurance benefits are typically based on your gross earned income, which includes salary, hourly wages, bonuses, commissions, and overtime. Investment income, rental income, or other passive income sources are generally not included in the benefit calculation.

The right benefit period depends on your age, savings, and risk tolerance. A 5-year benefit period covers most disability events, as many disabilities are resolved within this timeframe. However, if you have significant years until retirement and limited savings, a benefit period extending to age 65 provides more comprehensive protection.