Free income-protection tool for U.S. employees
How much disability insurance do you actually need?
Most employer disability plans replace 50–60% of your salary, and cap out well below that for higher earners. Answer a few questions below to see your real monthly income gap — it takes about two minutes.
About 1 in 4 of today's 20-year-olds will experience a disability that keeps them out of work before they reach retirement age. Source: U.S. Social Security Administration
How this is calculated
Nothing here is hidden. The calculator runs your numbers through the same basic gap analysis a fee-only financial planner would use:
- 1
Your target income need is your gross annual salary divided by 12, multiplied by the percentage you'd want to replace (default 65%).
- 2
Your employer's benefit is your salary times the plan's replacement percentage, capped at the plan's monthly maximum if one applies — then reduced for tax if your employer paid the premium.
- 3
Other income you listed (a spouse's paycheck, for example) is added to your employer benefit to get your total covered income.
- 4
Your gap is simply your target need minus what's already covered. That's the number an individual supplemental policy would need to fill.
- 5
Your cash cushion is your monthly need multiplied by your elimination period, compared against your current savings — since no benefit is paid during that waiting window.
Why this matters
Disability is one of the least planned-for financial risks — most people insure their car and their home long before they insure their paycheck, even though income is usually the bigger asset.
Frequently asked questions
How much disability insurance coverage do I actually need?
Most financial planners suggest replacing 60–70% of your gross income, since disability benefits are sometimes tax-free and your work-related expenses disappear while you're out. This calculator applies that range to your own numbers and subtracts what you already have covered.
Is my employer's disability insurance enough on its own?
Often not by itself. Most employer group long-term disability plans replace 50–60% of base salary and cap the monthly benefit, so the higher your income, the bigger the gap tends to be. Bonuses and commissions are also usually excluded from the calculation.
Is disability insurance income taxable?
It depends on who paid the premium. If your employer paid it, your benefit is taxed as ordinary income. If you paid the premium yourself with after-tax payroll deductions, the benefit is typically received tax-free.
What is an elimination period?
The elimination period is the waiting period between the day you become disabled and the day benefit payments start — commonly 30, 60, 90, or 180 days. You need savings or other income to cover expenses during that stretch, since no disability benefit is paid yet.
What's the difference between own-occupation and any-occupation coverage?
Own-occupation coverage pays out if you can't do your specific job, even if you could do a different kind of work. Any-occupation coverage only pays if you can't do any job you're reasonably suited for. Own-occupation is stronger protection and usually costs more.
How much does individual disability insurance typically cost?
Individual long-term disability policies typically cost around 1–3% of your annual income per year, though the exact price depends on your age, health, occupation, and the benefit amount and length you choose.