Not sure how much your disability insurance will cost? Let our calculator crunch the numbers for you.
Many people don’t take into consideration how they’d make ends meet if they become disabled and are unable work. They may assume they can count on workers’ compensation or Social Security disability benefits, but these options are limited.
A private long-term disability insurance policy is the best way to protect your income. But how much will that cost? Use this disability insurance calculator to find out how big of a disability benefit you need, how long it should last, and how much it will cost.
You only need to provide a few pieces of information to use our disability insurance calculator, including your gender, age, state of residence, occupation details, and income.
Click the button to get started, or read on for more information on calculating your own coverage needs and cost.
Your coverage needs largely determine the cost of your policy. To calculate how much coverage you need on your own, you need to consider:
Once you’ve determined those factors, calculate the following:
The calculator above can crunch the numbers and determine the recommended benefit amount and length based on your financial picture, but some back-of-the-napkin math can give you a ballpark calculation of how much you need.
As a general rule of thumb, long-term disability insurance will cost about 1% to 3% of your salary.
However, the actual price depends on a number of factors. A disability insurance base rate is a starting points based your personal profile and is calculated by looking at:
Once your base rate is set, it is factored into the final premium rate in conjunction with:
Learn more about long-term disability insurance cost.
When you’re shopping for disability insurance, you have three primary choices: long-term, short-term, and Social Security.
Long-term disability insurance is the best option for more people.
It’s easy to qualify for compared to Social Security disability insurance, and it lasts for a long time compared to short-term disability insurance. It’s the most comprehensive and cost-effective form of income protection you can buy.
However, these three types of disability insurance can complement each other; for instance, a short-term policy can cover the time before your long-term policy kicks in.
So how do you calculate these costs?
Short-term disability insurance costs about the same as a long-term policy — 1% to 3% of your income. You get slightly more coverage (about 80% of your pre-tax income, compared to 60% with long-term disability insurance).
Social Security disability insurance doesn’t technically cost anything (if you’ve had a job, you’ve paid into it via taxes). The average benefit amount is about $1,200; however, you can calculate your benefit amount with the Social Security Administration’s Social Security disability insurance calculator.
Learn more about the different types of disability insurance.
Besides looking for a policy that provides the coverage you need at a price you can afford, you should strongly consider which carrier is best for your profession when considering the best disability insurance company for you.
It’s important for everyone to protect their income, and especially so for people in high-paying professions that also have a high cost of education, like lawyers and doctors. Some companies provide more competitive rates and policy options than others for some professions, so be sure you’re working with the company that fits your needs and your chosen field.
Learn more about choosing the best disability insurance companies.
About the author
Colin Lalley is the Associate Director of SEO Content at Policygenius in New York City. His writing on insurance and personal finance has appeared on Betterment, Inc, Credit Sesame, and the Council for Disability Awareness. Colin has a degree in English from the University of North Carolina at Chapel Hill.
Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.
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