Disability Insurance

One of the most common causes of income loss is through a disability. While most disabilities cause only temporary loss of income, any income loss can be devastating if you are not financially prepared. This calculator helps you determine how much disability insurance you may need to cover expenses during such a disability.

While this calculator can provide you with some insight, it was developed to be very general and may not fit everyone’s personal situation. Please feel free to contact our office after using this calculator so that we can perform a more thorough analysis.

Definitions

Monthly net income

Your monthly net income. This calculation is done on an individual basis. Do not include your spouse's income.

Current monthly expenses

Your total monthly living expenses. Remember to include your home or rent payments, food, clothing, gas, phone and other monthly expenses.

Monthly expenses during disability

Your monthly expenses while you are disabled. This amount is usually a little less than your original monthly expenses. The default value for this field is calculated as 70% of your current monthly expenses. You should keep in mind however, that many expenses such as your mortgage, rent, utilities and food will most likely remain the same as before you were disabled.

Length of disability

The number of months you expect a disability will prevent you from working. A common mistake is to underestimate the time it takes to get back to work.

Current monthly coverage

Your current monthly disability coverage. Make sure to include any disability coverage supplied by your employer.

Length of coverage

Number of months that your current monthly coverage will last.

Annual inflation

What you expect for the average long-term inflation rate. A common measure of inflation in the U.S. is the Consumer Price Index (CPI), which has a long-term average of 3.1% annually, from 1925 through 2009. The CPI for 2009 was -1.0%, as reported by the Minneapolis Federal Reserve. If you are disabled for a short period of time, inflation is usually not a very important factor. However, you may need to consider the effect of inflation if you remain disabled for more than a few years.

Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

Calculators are provided by an independent third party and are being made available to you as self-help tools for your independent use and are not intended to provide investment advice or be representative of actual results. We do not guarantee their applicability or accuracy in regards to your individual circumstances. The determinations made by these calculators should not be construed as guarantees or projections. Moreover, the reasonableness of certain information may change over time because of changes in tax law, investment trends and your personal circumstances. The information contained here is based on current law and has been obtained from sources believed to be reliable, but we do not guarantee its accuracy. Investment results can vary considerably depending on the type of securities involved, general market conditions and other factors. It is important that you periodically review and update your plans. Raymond James does not provide tax or legal advice. You should contact your tax or legal advisor concerning your particular situation. All investments carry a degree of risk, and past performance is not a guarantee of future results.