{
  "slug": "disability-insurance-needs",
  "title": "Disability Insurance Calculator",
  "heading": "Disability Insurance Needs Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/disability-insurance-needs",
  "summary": "Monthly benefit needed to cover expenses if you cannot work.",
  "description": "Own-occupation disability policies typically replace 60% of gross income, and benefits are tax-free when you pay the premium yourself — which changes how much coverage you actually need.",
  "formula": "Gap = Monthly expenses − (employer benefit + other income).",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=disability-insurance-needs",
  "inputs": [
    {
      "id": "income",
      "label": "Gross monthly income",
      "kind": "number",
      "hint": null,
      "default": 8000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "expenses",
      "label": "Essential monthly expenses",
      "kind": "number",
      "hint": null,
      "default": 5200,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "employer",
      "label": "Employer benefit",
      "kind": "number",
      "hint": null,
      "default": 60,
      "unit": "% of income",
      "min": 0,
      "max": 100
    },
    {
      "id": "employerTaxable",
      "label": "Employer benefit taxed?",
      "kind": "select",
      "hint": null,
      "default": "yes",
      "options": [
        {
          "value": "yes",
          "label": "Yes (employer-paid)"
        },
        {
          "value": "no",
          "label": "No (you pay premiums)"
        }
      ]
    },
    {
      "id": "taxRate",
      "label": "Effective tax rate",
      "kind": "number",
      "hint": null,
      "default": 22,
      "unit": "%",
      "min": 0,
      "max": 50
    },
    {
      "id": "otherIncome",
      "label": "Other monthly income",
      "kind": "number",
      "hint": null,
      "default": 0,
      "unit": "$",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "gap",
      "label": "Monthly benefit gap to insure",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "net",
      "label": "After-tax employer benefit",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "annualGap",
      "label": "Annual shortfall",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "coverageRatio",
      "label": "Expenses covered today",
      "format": "percent",
      "hint": null,
      "primary": false
    },
    {
      "id": "shortfallPct",
      "label": "Share of expenses uncovered",
      "format": "percent",
      "hint": null,
      "primary": false
    },
    {
      "id": "gross",
      "label": "Gross employer benefit",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Gross monthly income: 8000 $",
      "Essential monthly expenses: 5200 $",
      "Employer benefit: 60 % of income",
      "Employer benefit taxed?: Yes (employer-paid)",
      "Effective tax rate: 22 %",
      "Other monthly income: 0 $"
    ],
    "outputs": [
      "Monthly benefit gap to insure: $1,456.00",
      "After-tax employer benefit: $3,744.00",
      "Annual shortfall: $17,472.00",
      "Expenses covered today: 72.0%",
      "Share of expenses uncovered: 28.0%",
      "Gross employer benefit: $4,800.00"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter gross monthly income ($).",
      "Enter essential monthly expenses ($).",
      "Enter employer benefit (% of income).",
      "Enter employer benefit taxed?.",
      "Enter effective tax rate (%).",
      "Enter other monthly income ($).",
      "Read your monthly benefit gap to insure on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "income": 4800,
        "expenses": 3100,
        "employer": 35,
        "employerTaxable": "yes",
        "taxRate": 13,
        "otherIncome": 0
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "income": 8000,
        "expenses": 5200,
        "employer": 60,
        "employerTaxable": "yes",
        "taxRate": 22,
        "otherIncome": 0
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "income": 12800,
        "expenses": 8300,
        "employer": 95,
        "employerTaxable": "yes",
        "taxRate": 35,
        "otherIncome": 0
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "How does the disability insurance needs calculator work?",
      "a": "Own-occupation disability policies typically replace 60% of gross income, and benefits are tax-free when you pay the premium yourself — which changes how much coverage you actually need. The underlying maths is: Gap = Monthly expenses − (employer benefit + other income)."
    },
    {
      "q": "What do I need to enter?",
      "a": "6 values: gross monthly income, essential monthly expenses, employer benefit, employer benefit taxed?, effective tax rate, and other monthly income. Each field starts with a sensible default, so you can change one number at a time and watch the result move."
    },
    {
      "q": "What does the monthly benefit gap to insure result mean?",
      "a": "It is returned as a money amount in US dollars and updates live as you edit the inputs, so you can compare two or three versions of a scenario in a few seconds."
    },
    {
      "q": "Is this calculator free, and do I need an account?",
      "a": "Yes, it's free, and no account is required. Nothing you type is stored on our servers — the maths runs entirely in your browser."
    },
    {
      "q": "How accurate is the result?",
      "a": "It applies the standard formula exactly, so the arithmetic is precise. Results are estimates before tax, fees, and inflation unless an input explicitly covers them."
    },
    {
      "q": "Who is this tool for?",
      "a": "It's built for anyone comparing money scenarios before committing — budgeting a payment, sanity-checking a quote, or seeing what a change in rate or term actually costs."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/life-insurance-needs",
    "https://www.revenuelab.fyi/toolbox/emergency-fund"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Disability Insurance Calculator (https://www.revenuelab.fyi/toolbox/disability-insurance-needs)"
}