Disability Insurance Needs Calculator
Figure basis: Illustrative assumptionFind the monthly disability insurance gap your household would face if you could not work. Enter your gross monthly income, the share of it you want replaced (a common target is 60 percent, because a policy you fund yourself usually pays tax-free), and any cover you already have, such as an employer long-term disability plan or an estimated Social Security disability benefit. The calculator shows the monthly benefit you would still need, the yearly total, and an illustrative lump-sum equivalent over the years until retirement. There is no official figure for how much disability cover you need, so every input here is a clearly-labelled assumption you can change. It is general information, not personalised insurance or financial advice.
Replacing 60% of a $6,500 monthly income is a target benefit of $3,900.00 a month. After an existing $1,500 employer benefit, the disability coverage gap is $2,400.00 a month ($28,800.00 a year).
How to read the badges beside each field: Official figures come from a cited authority; Regional average and Illustrative assumption values are editable placeholders, so replace them with your own figure before you rely on the result.
How the disability coverage gap is calculated
The gap is what an individual disability policy would need to pay each month on top of any cover you already hold:
target monthly benefit = gross monthly income x replacement rate
monthly gap = max(0, target monthly benefit - employer benefit - Social Security benefit)
annual gap = monthly gap x 12
lump-sum equivalent = monthly gap x 12 x years to cover
The lump-sum equivalent is undiscounted: it simply totals the monthly gap over the horizon so you can picture the scale. A real disability policy pays a monthly benefit, so the monthly gap is the figure to shop on.
Worked example
$6,500 gross monthly income, replacing 60 percent, with a $1,500 employer benefit and no assumed Social Security, over 25 years to retirement:
- Target monthly benefit = $6,500 x 60% = $3,900
- Monthly gap = $3,900 - $1,500 = $2,400
- Annual gap = $2,400 x 12 = $28,800
- Lump-sum equivalent = $2,400 x 12 x 25 = $720,000
The coverage people forget they need
Disability is the income risk most working households underinsure. Your ability to earn is usually your largest asset, worth far more over a career than the house or the car most people insure without a second thought, yet a long illness or injury is a more likely reason to stop working before 65 than an early death. A policy that replaces income is what keeps the mortgage paid and the retirement savings intact if you cannot work for years.
The trap is assuming the cover at work is enough. Group long-term disability is a good base layer, but it typically replaces only base salary (not bonus or commission), is often capped at a monthly maximum that clips higher earners, and is usually taxable when the employer paid the premium, so the take-home benefit is smaller than the headline percentage suggests. Enter the after-tax monthly figure you would truly receive, and the gap here shows what an individual policy, whose benefit is tax-free when you fund it yourself, would need to add.
Two policy details change the value of any cover more than the monthly amount: the definition of disability (an "own-occupation" policy pays if you cannot do your specific job, a stricter "any-occupation" one pays only if you cannot do any job) and the elimination period (how long you wait before benefits start, which should line up with how many months your emergency fund can carry you). Size the gap here, then compare quotes on those two terms, not on price alone.
Disability insurance needs: frequently asked questions
How much disability insurance do I need?
Enough to cover your essential monthly costs if you could not work. A common target is to replace about 60 percent of your gross income, because long-term disability benefits paid by a policy you funded with after-tax dollars are usually tax-free, so 60 percent of gross often lands close to your take-home pay. Subtract any benefit you already have (employer long-term disability cover or an estimated Social Security disability benefit) to find the gap this calculator shows.
Why 60 percent of income and not 100 percent?
Insurers rarely offer to replace all of your income, to keep an incentive to return to work, and they typically cap individual policies around 60 to 70 percent of gross earnings. Benefits from a policy you pay for yourself with after-tax money are generally received tax-free, so replacing 60 percent of gross income is often close to your actual take-home pay. Adjust the replacement rate in the calculator to match a quote or your own budget.
Does my employer's disability coverage count?
Yes, subtract it. Many employers provide group long-term disability that replaces roughly 50 to 60 percent of base salary, but it often excludes bonuses and commission, may be capped at a monthly maximum, and if the employer paid the premiums the benefit is usually taxable. Enter the monthly benefit you would actually receive after any tax, so the gap reflects what an individual policy would need to top up.
Should I include Social Security disability?
Only cautiously. Social Security Disability Insurance (SSDI) has a strict definition of disability and does not pay for partial or short-term disability, so many claims that a private policy would cover are denied. If you include an estimated SSDI benefit, treat the resulting gap as a best case and consider sizing your private cover closer to the gap before Social Security.
Method and sources
- Coverage sizing uses the income-replacement needs method; the replacement rate and all figures are your own inputs, so no government or insurer figure is required.
- On the strict test for federal disability benefits and why they should not be assumed, see the Social Security Administration disability benefits pages.
Reviewed by the CalculatorHub team, edited by James Graham, 28 July 2026. See our methodology. General information only, not financial or insurance advice. Consider speaking with a licensed insurance professional or fee-only financial planner.