Short-term vs long-term DI?

STD: 3-6 months coverage, common employer benefit. LTD: 5+ years or to age 65, often privately purchased on top.

Group vs individual policy?

Group through employer is cheaper but tied to job; benefits taxed if employer pays. Individual is portable; benefits tax-free if you pay premium with after-tax dollars.

How likely am I to need it?

About 1 in 4 working adults will experience a disability lasting 90+ days during their career. Most are illness-related, not accident.

1-3% of income for solid LTD coverage. The "cost of not having" is much higher.

Short-term vs long-term DI?

STD: 3-6 months coverage, common employer benefit. LTD: 5+ years or to age 65, often privately purchased on top.

Group vs individual policy?

Group through employer is cheaper but tied to job; benefits taxed if employer pays. Individual is portable; benefits tax-free if you pay premium with after-tax dollars.

How likely am I to need it?

About 1 in 4 working adults will experience a disability lasting 90+ days during their career. Most are illness-related, not accident.

1-3% of income for solid LTD coverage. The "cost of not having" is much higher.

Disability Insurance Needs Calculator

Compute monthly benefit needed: typically 60-70% of gross income, less Social Security DI.

Result

Private disability benefit needed

$3,700/mo

65% of income, less expected SSDI.

Gross income$8,000/mo
Target replacement65% = $5,200/mo
Expected SSDI$1,500/mo
Private DI gap$3,700/mo
Annual benefit$44,400

Standard 60-70% target — matches typical take-home

Replacement target

65% of gross income.

$5,200/mo

SSDI fills

29% of the target — only if you qualify under SSA strict definition.

$1,500/mo

Private LTD gap to fill

What a private long-term disability policy must cover.

$3,700/mo

Career-disability base rate

Council for Disability Awareness: roughly 1 in 4 working adults experiences a 90+ day disability before retirement.

~25%

Source: Council for Disability Awareness (CDA) Disability Statistics; SSA SSDI eligibility criteria 20 CFR §404.1505 (strict "unable to engage in any substantial gainful activity").

Not financial advice — SSDI denial rate at initial application is ~67% (SSA published data). Many planners conservatively set expected SSDI to $0 when sizing private long-term disability coverage. Group LTD via employer is taxable if employer-paid; individual policies funded with after-tax dollars pay tax-free benefits.

Step-by-step

Replacement target: 8,000 × 0.65 = $5,200/mo.
Less SSDI: $5,200 − $1,500 = $3,700/mo private DI needed.

How to use this calculator

Enter your monthly gross income.
Pick a replacement target (65% is typical).
Subtract estimated SSDI to find the private gap.

About this calculator

Disability insurance replaces income if you can't work. Typical target: 60-70% of gross income (after-tax this is roughly your usual take-home). Subtract estimated Social Security Disability Insurance (SSDI) to find the gap a private policy needs to fill. SSDI is hard to qualify for — many planners ignore it for safety.

Frequently asked

Own-occupation pays if you can't do your specific job. Any-occupation pays only if you can't do any work. Own-occ is much more valuable for high earners; any-occ is cheaper.