Disability Income Insurance Needs Calculator

Understanding the Disability Insurance Calculator

Your ability to earn an income is your most valuable asset. Disability insurance is designed to protect that asset by providing a monthly benefit if you are unable to work due to an injury or illness. This calculator helps you estimate how much coverage you might need to maintain your financial stability during such a period.

How It Works

The calculator performs a simple needs analysis based on your monthly income and expenses.

• Gross Monthly Income: Your total income before taxes. Insurance policies typically replace a percentage of this amount, usually around 60%.
• Essential Monthly Expenses: The core expenses you would still need to cover if you were disabled, such as your mortgage/rent, utilities, food, and loan payments.
• Other Monthly Income: Any income that would continue even if you were disabled, such as a spouse's income, rental income, or other existing benefits.

The Calculation

The tool first calculates your estimated disability benefit (typically 60% of your gross income). It then adds your other continuing income sources to this benefit. Finally, it subtracts your essential monthly expenses from this total income to determine if you have a surplus or a shortfall. The "Recommended Monthly Benefit" is the amount needed to cover your essential expenses after accounting for your other sources of income. This figure gives you a solid target to aim for when shopping for a disability insurance policy.

Frequently Asked Questions