Disability Income Insurance Calculator
Calculate your long-term disability monthly benefit, premium, and lifetime coverage. Factors in occupation class, waiting period, benefit period, and SSDI offset.
Your Profile
Disability Insurance Estimate
Monthly Benefit
$5,100
Premium: $170/mo (2% of income)
Annual Benefit
$61,200
Annual Premium
$2,040
Lifetime Benefit
$306,000
% of Income
2%
The "forgotten" coverage
1 in 4 of today's 20-year-olds will become disabled 90+ days before retirement (Social Security Administration). Yet only about 30% of private-sector workers carry long-term disability. Your working-years earnings — often $3-10M lifetime — is your single largest asset. A disability claim, not death, is the leading cause of US mortgage foreclosures and consumer bankruptcies.
Own-occupation vs any-occupation
Own-occupation (gold standard): pays if you can't perform the material duties of YOUR specific job, even if you could do a different one. A surgeon with a hand tremor collects. Any-occupation: pays only if you can't do any job for which you're reasonably qualified. Most group LTD flips from own-occ to any-occ after 24 months — individual policies (Guardian, MassMutual, Principal, Ameritas) can hold true own-occ to age 65.
SSDI and the 5-month wait
Social Security Disability Insurance has a mandatory 5-month waiting period from onset, plus an average 3-8 month approval backlog — most approved claimants wait 8-13 months for their first SSDI check. Your private LTD typically offsets dollar-for-dollar against SSDI once it starts. The value of private LTD is (a) bridging the SSDI wait and (b) paying a higher benefit, since SSDI maxes at ~$3,822/month.
Taxation
Employer-paid premium → benefits taxable. Employee-paid with after-tax dollars → benefits tax-free. If your employer offers to gross-up your salary so you can pay the premium yourself, take it — tax-free benefits deliver much more in-pocket during a claim.
Common questions about Disability Income
Why is disability insurance called the "forgotten" coverage?+
Statistically, 1 in 4 of today's 20-year-olds will become disabled for 90+ days before retirement (Social Security Administration). Yet only ~30% of private-sector workers have long-term disability coverage. Your working years earnings — potentially $3-10M — are your largest asset and vastly under-insured. One bad MRI, a stroke, or chronic pain that keeps you out of work for 2 years can wipe out a middle-class family financially.
Own-occupation vs any-occupation — what's the difference?+
Own-occupation (the gold standard): pays if you can't perform the material duties of YOUR specific job, even if you could work another job. A surgeon with a hand tremor collects full benefits even if they could teach. Any-occupation: pays only if you can't do any job for which you're reasonably qualified — a much harder threshold. Many group LTD plans flip from own-occ to any-occ after 24 months. True own-occ for life is only available via individual disability policies (Guardian, MassMutual, Principal, Ameritas).
What is the SSDI 5-month waiting period?+
Social Security Disability Insurance has a mandatory 5-month waiting period from onset of disability before benefits start, plus an average 3-8 month approval backlog. Net: most approved claimants wait 8-13 months for their first SSDI check. Private LTD is designed to bridge that gap — choose a 90- or 180-day waiting period on LTD so benefits start months before SSDI kicks in.
Will SSDI offset my private disability benefit?+
Almost always yes. Standard LTD policies coordinate with Social Security: your monthly private benefit is reduced dollar-for-dollar by the SSDI payment. Example: $5,000/mo LTD benefit minus $2,200/mo SSDI = $2,800/mo from the private insurer. Some premium individual disability policies offer a "no-offset" or "base + SSDI" rider for higher-earners who want true additive benefits — roughly 15-25% higher premium.
Is the benefit taxable?+
Depends on who paid the premium. Employer-paid LTD premiums: benefits are fully taxable as income. Employee-paid with after-tax dollars: benefits are tax-free. Split premium: taxable in proportion. A 66% replacement on a gross LTD becomes ~48% net after tax; a 60% tax-free benefit actually delivers more in-pocket. If your employer pays, consider paying the premium yourself (gross-up your salary) to get tax-free benefits.
What occupation class applies to me?+
Carriers use 5-6 classes. Class 1/5A: white-collar professionals (doctors, lawyers, engineers, consultants) — cheapest premiums, true own-occ available. Class 2/4A: skilled white-collar (teachers, managers, bookkeepers). Class 3/3A: light manual (retail, light-duty trades). Class 4/2A: medium manual (nurses, mechanics). Class 5/1A: heavy manual (construction, firefighters, roofers) — highest premium, often any-occ only, capped benefit periods. Occupation drives premium more than age does.
Should I buy individual LTD if my employer offers group?+
Often yes, layered. Group LTD caps benefits at $10-15k/month, is employer-paid (taxable), switches to any-occ after 2 years, and vanishes when you leave the job. An individually-owned LTD policy is portable, typically true own-occ for the full benefit period, tax-free if you pay premium, and priced at your current (younger, healthier) age. Professionals earning $150k+ should seriously consider an individual policy for $5-10k extra monthly benefit on top of group.