Calculator Inputs
Use the fields below to estimate gross and net disability benefit values under custom plan assumptions.
Example Data Table
This sample shows a realistic setup for evaluating a disability income projection.
| Input | Example Value | Reason |
|---|---|---|
| Annual Salary | $72,000 | Main pre disability earnings source. |
| Annual Bonus | $6,000 | Partially counted by some policies. |
| Bonus Inclusion % | 50% | Includes a limited share of variable pay. |
| Income Replacement % | 60% | Common long term disability ratio. |
| Disability Severity % | 100% | Represents total work loss in this example. |
| Other Monthly Offsets | $300 | Offsets can reduce payable benefits. |
| Elimination Period | 90 days | Benefits usually start after waiting time. |
| COLA Growth | 3% | Used for longer benefit periods. |
Formula Used
1) Covered Monthly Earnings
Covered Monthly Earnings = (Annual Salary ÷ 12) + ((Annual Bonus × Bonus Inclusion %) ÷ 12)
2) Replacement Benefit
Replacement Benefit = Covered Monthly Earnings × Income Replacement %
3) Severity Adjusted Benefit
Severity Adjusted Benefit = Replacement Benefit × Disability Severity %
4) Base Gross Monthly Benefit
Base Gross Monthly Benefit = Minimum of Maximum Monthly Benefit and (Severity Adjusted Benefit + Dependent Supplement)
5) Offset Adjusted Monthly Benefit
Offset Adjusted Benefit = Greater of Minimum Monthly Benefit and (Base Gross Monthly Benefit − Other Monthly Offsets)
6) Net Monthly Benefit
Net Monthly Benefit = Offset Adjusted Benefit × (1 − Tax Rate) when taxable. Otherwise, Net Monthly Benefit = Offset Adjusted Benefit.
7) Growth for Longer Claims
Monthly Benefit in Later Years = Base Benefit × (1 + COLA Rate) for each completed twelve month payment block.
How to Use This Calculator
Step 1: Enter annual salary and any annual bonus.
Step 2: Set how much of the bonus is counted by the plan.
Step 3: Add the replacement percentage and disability severity percentage.
Step 4: Enter offsets, minimums, maximums, and dependent support if applicable.
Step 5: Add waiting days, benefit months, growth rate, and tax assumptions.
Step 6: Click the estimate button to see monthly values, totals, and the benefit chart above the form.
FAQs
1) What does this disability benefits estimator calculate?
It estimates monthly and total disability income using salary, bonus treatment, replacement rate, disability severity, offsets, tax assumptions, waiting period, benefit duration, and annual growth.
2) Why do offsets reduce the final benefit?
Many disability plans subtract outside income sources, such as Social Security disability, workers compensation, or employer paid supplements. This avoids paying more than the policy allows.
3) What is the elimination period?
The elimination period is the waiting time before benefits begin. During this period, the schedule shows zero payable benefit even though the claim has started.
4) How does partial disability affect the estimate?
Partial disability is modeled through the disability severity percentage. Lower values reduce the replacement amount before caps, minimums, and offsets are applied.
5) Why is there a taxable and non taxable option?
Some disability benefits are taxed depending on how premiums were paid. This option helps compare gross plan value with estimated take home benefit.
6) What does COLA do in the projection?
COLA increases benefit values during long claims. This estimator applies annual growth after each completed twelve month payment block to show how benefits may rise.
7) Can I use this for short term and long term disability?
Yes. Change the waiting days, payment months, and plan limits to reflect a short term or long term structure. The model works for either benefit style.
8) Is this an official claim decision tool?
No. It is a planning estimator only. Actual benefit decisions depend on policy wording, insurer rules, claim approval, offsets, earnings definitions, and tax treatment.