Disability Insurance Calculator

Disability Insurance

One of the most common causes of income loss is through a disability. While most disabilities cause only temporary loss of income, any income loss can be devastating if you are not financially prepared. This calculator helps you determine how much disability insurance you may need to cover expenses during such a disability.

Information and interactive calculators are made available to you only as self-help tools for your independent use and are not intended to provide investment or tax advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

Disability Insurance

One of the most common causes of income loss is through a disability. While most disabilities cause only temporary loss of income, any income loss can be devastating if you are not financially prepared. This calculator helps you determine how much disability insurance you may need to cover expenses during such a disability.

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By changing any value in the following form fields, calculated values are immediately provided for displayed output values. Click the view report button to see all of your results.

Disability Insurance Needs

*indicates required.

Current monthly expenses:*This entry is required.Enter an amount between $0 and $100,000

Disability monthly expenses:*This entry is required.Enter an amount between $0 and $100,000

Current monthly coverage:*This entry is required.Enter an amount between $0 and $100,000

Months of disability:*This entry is required.Enter an amount between 1 and 120

Months of coverage:*This entry is required.Enter an amount between 0 and 240

Annual Inflation:*This entry is required.Enter an amount between 0% and 20%

Your current shortfall is $250 per month Line Graph: Please use the calculator's report to see detailed calculation results in tabular form.

Your current shortfall is $250 per month.

Definitions

Current monthly expenses

Your total monthly living expenses. Remember to include your home or rent payments, food, clothing, gas, phone and other monthly expenses.

Disability monthly expenses

Your monthly expenses while you are disabled. This amount is usually a little less than your original monthly expenses. The default value for this field is calculated as 70% of your current monthly expenses. You should keep in mind, however, that many expenses such as your mortgage, rent, utilities and food will most likely remain the same as before you were disabled.

Months of disability

The number of months you expect a disability will prevent you from working. A common mistake is to underestimate the time it takes to get back to work.

Current monthly coverage

Your current monthly disability coverage. Make sure to include any disability coverage supplied by your employer.

Months of coverage

Number of months that your current monthly coverage will last.

Annual inflation

This is what you expect for the average long-term inflation rate. A common measure of inflation in the U.S. is the Consumer Price Index (CPI). From 1925 through 2022 the CPI has a long-term average of 3.0% annually. Over the last 40 years the highest CPI recorded was 13.5% in 1980. For the 12 months ending October 31^st 2022 the CPI for All Urban Consumers (CPI-U) was 7.7% as reported by the U.S. Bureau of Labor Statistics. If you are disabled for a short period of time, inflation is usually not a very important factor. However, you may need to consider the effect of inflation if you remain disabled for more than a few years.

Disability Insurance Calculator