How much disability insurance do you need?
We'll look at the following to determine how much you need.
- Estimated monthly income after taxes
- Available income if you became disabled
- Monthly expenses
Step 1: What is your estimated after-tax monthly income?
Step 1: Results
Monthly income after taxes
Step 2a: What household income would be available if you became disabled?
If you have disability insurance through your employer, select the appropriate percentage.
Step 2b: What household income would be available if you became disabled?
Step 2: Results
Income available if you became disabled
Step 3: What are your monthly expenses?
Step 3: Results
Disability income gap
Disability income sources
Disability Income Gap: The difference between the total disability income sources and the estimated monthly expenses. This amount represents the gap in financial protection that exists for a disability.
This is a hypothetical example. Remember, disability income insurance does not cover 100 percent of your income. Your financial representative can illustrate the amount you're eligible for, based on current underwriting guidelines.Continue
Total disability income sources
Total monthly expenses
Monthly disability income gap
Disability income insurance from Principal Life Insurance Company can help protect you and your family's financial security. And - depending on your age, income and other factors - it can be one of the most affordable components of your financial protection strategy.
Whether your goal is maximum income protection, safeguarding specific expenses (mortgage, tuition, retirement), or budget-based coverage - Principal Life can help. To find out more, contact your Principal Life financial representative.
Disability insurance has limitations and exclusions. For costs and complete details of coverage, contact your Principal Life representative. Insurance issued by Principal Life Insurance Company. Principal Life is a member of the Principal Financial Group®, Des Moines, IA 50392. This information is believed to be accurate and authoritative in regard to the subject matter covered. The accuracy of the information is not guaranteed and is provided with the understanding that Principal Life is not rendering legal, accounting or tax advice. In specific cases clients should consult their legal, accounting or tax advisors.
Gross annual income
Enter your gross annual income. The calculator will calculate your estimated after-tax monthly income. Spouse income is entered later.Back
Estimated tax bracket
25% represents an average household tax bracket including Federal, State and FICA taxes. Consult your tax advisor for complete details.Back
Group disability benefit
Because group disability insurance benefits are usually taxable, your benefit amount is stated in after-tax dollars. After taxes, even a typical policy that covers 60% of your income may be reduced to only 45%. Will that be enough?Back
Maximum monthly benefit
The maximum amount the insured is eligible to receive based on policy guidelines. The most common formula is 60%, not to exceed $5,000 month.Back
This is the number of days you must wait before benefits begin. Benefits will be paid once a month after the waiting period (also may be called the Elimination Period) is satisfied. The most common elimination period for group disability insurance plans is 180 days.Back
This is the length of time you will receive benefits after satisfying the waiting period (also may be called the Elimination Period). The most common benefit period for group disability insurance plans is 5 years.Back
Individual waiting period
This is the number of days you must wait before benefits begin. Benefits will be paid once a month after the waiting period (also may be called the Elimination Period) is satisfied. The most common individual disability income insurance waiting period is 90 days.Back
Individual benefit period
Proceeds from individual disability income policies are typically not taxable if premiums are paid by you. Consult your tax advisor for details.
This is the length of time you will receive benefits after satisfying the waiting period (also may be called the Elimination Period). The most common benefit period for individual disability insurance plans is To Age 65.Back
Monthly Social Security disability benefit
In most cases, this answer will be zero. For an exact figure, visit the Social Security website.
Do not enter an amount here if you have already entered an amount for group disability insurance. If you have Group Long-Term Disability (LTD) coverage, benefits will be integrated with any Social Security disability benefits you might receive.
Additional household income
Add the after tax monthly value of other sources of income such as spouse income, rental income, etc.Back
Mortgage / rent
Even if your mortgage is paid off, be sure to consider the monthly cost of property taxes, association dues and other fees if applicable.
Utilities and household expenses
Please enter an estimate. Examples include: electricity, gas, water, phone, cable, internet and waste management.Back
Food / household supplies
Please enter an estimate. Be sure to include dining out.Back
Auto payments and expenses
Please enter an estimate. Include fuel and maintenance costs.Back
Loans, credit cards and charge accounts
Total the amount you typically pay each month on your loans and credit cards.Back
Total your current monthly premiums for medical, dental, life, auto, homeowner's and other types of insurance.Back
Add the monthly cost for childcare, school lunches and special interests or events.Back
Saving and investing
Are you setting aside money for retirement, college expenses or an emergency fund?Back
Other monthly expenses
Add the monthly cost for 'other' expenses, such as entertainment, clothes, etc.Back