Calculator Inputs
Example Data Table
Sample scenarios showing how offsets, waiting periods, and benefit duration can change the estimated protection and premium.
| Scenario | Monthly Income | Target % | Offsets | Waiting Days | Duration | Net Need | Total Protection |
|---|---|---|---|---|---|---|---|
| Office role, standard health | PKR 250,000 | 70% | PKR 20,000 | 60 | 24 months | PKR 155,000 | PKR 3,720,000 |
| Field role, smoker, longer duration | PKR 300,000 | 75% | PKR 0 | 90 | 60 months | PKR 225,000 | PKR 13,500,000 |
| Professional, preferred health, COLA | PKR 400,000 | 65% | PKR 50,000 | 30 | To age 65 | PKR 210,000 | Increases with COLA |
Formula Used
Offsets = Other Income + Employer Coverage
Monthly Need (net) = max(0, Target Benefit − Offsets)
If COLA on: r = (1+COLA)^(1/12) − 1
Total = Need × ((1+r)^Months − 1) ÷ r
Factors include: age, occupation risk, health class, smoker,
waiting period, benefit duration, riders, and payment mode.
How to Use This Calculator
- Enter your monthly income and choose a replacement target percentage.
- Add offsets like employer coverage or other income you expect to continue.
- Select a waiting period and enter liquid savings to check any reserve gap.
- Pick a benefit duration, then enable COLA if you want inflation adjustment.
- Set underwriting assumptions like age, occupation risk, health class, and smoker status.
- Click Calculate to view results above the form, then export CSV or PDF.
Monthly Benefit Gap and Net Need
Income replacement planning begins with the monthly benefit gap. If income is PKR 250,000 and the target is 70%, the gross benefit target is PKR 175,000. Subtract ongoing offsets such as PKR 20,000 employer coverage and PKR 0 other income, and the net benefit need becomes PKR 155,000. This calculator keeps the gap from going below zero, preventing over‑insurance assumptions.
Waiting Period and Cash Reserve
Waiting periods shift risk from the insurer to your savings. A 60‑day waiting period equals about 1.97 months. With a net need of PKR 155,000, the waiting reserve requirement is roughly PKR 305,000. If liquid savings are PKR 500,000, the waiting gap is PKR 0; if savings are PKR 100,000, the gap is about PKR 205,000, signaling a short‑term cash buffer issue.
Benefit Duration and Total Protection
Benefit duration drives the total protection figure. With a flat PKR 155,000 net need for 24 months, total protection is PKR 3.72 million. Extending to 60 months increases total protection to PKR 9.30 million at the same monthly need. The calculator also estimates “to age 65” by converting remaining years to months, which can materially change long‑range coverage planning.
Inflation Adjustment Through COLA
Inflation protection (COLA) changes the benefit stream. With a 3% annual COLA, the calculator converts this to a monthly growth rate and sums the increasing payments. Over 60 months, a PKR 155,000 starting benefit produces more total protection than a flat benefit, helping preserve purchasing power. The trade‑off is a higher estimated premium factor to reflect the richer benefit design.
Premium Drivers and Scenario Comparison
Premium estimates combine a base rate with underwriting-style multipliers. Age bands increase cost as claim probability rises, while occupation risk, health class, and smoker status adjust the pricing risk. Waiting periods discount premiums because benefits start later, and longer benefit durations increase cost. Optional riders add modest loadings so you can compare value versus price across scenarios. Use payment mode choices to model fees and align premiums with budgeting preferences.
FAQs
What does “replacement target” mean?
It is the percentage of your monthly income you want to protect. Many plans cover 60–80% because benefits may be tax‑treated differently and some expenses can fall during disability.
Why subtract offsets like employer coverage?
Offsets reduce the amount you must insure. If employer benefits or other income continues, your policy only needs to cover the remaining gap, which can lower premiums and improve approval outcomes.
How should I pick a waiting period?
Choose a waiting period your emergency fund can cover. Longer waiting periods usually cost less, but they require more savings to bridge the gap before benefits start.
What is COLA and when is it useful?
COLA is an inflation adjustment that increases benefits over time. It is most useful for longer benefit durations, where inflation can erode purchasing power across multiple years.
Are the premium results a guaranteed quote?
No. The premium is an estimate for scenario comparison. Real pricing depends on insurer tables, underwriting, exclusions, policy definitions, and local regulatory requirements.
How do riders change the results?
Riders add extra features such as own‑occupation definitions or partial disability support. They typically increase estimated premiums, but they may improve claim eligibility and reduce coverage gaps in complex income situations.