Calculate how much disability insurance coverage you need based on your income, existing employer benefits, and target income replacement percentage.
Written & fact-checked by the CoverFormula editorial team · Last reviewed 2026-07-15
A serious illness or injury is statistically far more likely to interrupt your income before retirement than death is — yet most workers carry life insurance and skip disability coverage entirely. Disability insurance replaces a portion of your income if you become unable to work.
Insurers typically cap individual disability policies at 60-70% of gross income (to preserve the incentive to return to work). This tool multiplies your gross monthly income by your target replacement percentage, then subtracts any group/employer coverage you already have to show the remaining gap an individual policy should fill. It also estimates the savings you'd need on hand to bridge the "elimination period" — the waiting window before benefit payments begin.
Coverage Gap = (Gross Monthly Income × Target Replacement %) − Existing Group/Employer BenefitMost individual and group long-term disability policies replace 60-70% of gross income, since benefits are often received tax-free (for individually-paid premiums) and insurers want to preserve a financial incentive to return to work.
The elimination period is the waiting time (commonly 30, 60, or 90 days) between the start of a disability and when benefit payments begin. A longer elimination period generally lowers your premium but requires more emergency savings to bridge the gap.
Often not fully — many group policies replace only 50-60% of base salary and may exclude bonuses or commissions, plus benefits are usually taxable if your employer paid the premiums. An individual supplemental policy can close that gap.