Long-Term Disability Insurance Gap Calculator 2026
“60% of my salary” sounds reassuring — until the monthly cap, the tax bite, and uncounted bonuses shrink it. Enter your numbers and see your real take-home benefit, your exact coverage gap, and what a supplemental policy would cost.
1 · Your income and employer LTD plan
Your numbers
What moves your premium
| Scenario | Est. monthly premium range | What changes |
|---|
2 · The five gaps your employer plan is hiding
- The monthly cap: a 60% promise on $120,000 is $6,000/mo — but a $5,000 cap cuts it to 50%.
- The tax bite: employer-paid benefits are taxable — $5,000 gross ≈ $3,900 spendable at 22%.
- "Salary" ≠ compensation: bonuses and commissions are excluded from the percentage.
- Not portable: coverage ends when you leave the job.
- Definition weakens: many plans switch from own-occupation to any-occupation after 24 months.
3 · How the estimate is built
Premium model calibrated to the published 1%–3% of annual income band ($83–$250/mo per $100,000 at neutral risk), adjusted for age, occupation class, and elimination period. Insurers cap total coverage at ~60–70% of income.
The gap itself is pure arithmetic: the target is 65% of monthly income, minus your employer plan's net spendable benefit after the cap and tax bite. The supplemental premium scales with the gap size.
4 · Frequently asked questions
- How much does long-term disability insurance cost in 2026?
- The industry rule of thumb is 1% to 3% of your annual income per year — about $83–$250/month per $100,000 of earnings for a 90-day elimination period.
- Is my employer's disability plan enough?
- Usually not by itself. Most group LTD plans replace 60% of salary up to a monthly cap; benefits are taxable when employer-paid; bonuses excluded; not portable.
- Are employer-paid disability benefits taxable?
- Yes — a $5,000/month gross benefit becomes roughly $3,900 spendable at a 22% marginal rate.
- What is own-occupation vs any-occupation?
- Own-occupation pays if you cannot do your own job; any-occupation only if you cannot work any qualifying job. True own-occupation costs more.
- What elimination period should I choose?
- 90 days is the sweet spot. Match it to your emergency fund.
- Will SSDI be enough?
- For most households, no — average ~$1,630/month; only ~30% of initial claims approved.
- How likely am I to become disabled before retirement?
- More than 1 in 4 of today's 20-year-olds will face a 90+ day disability before 67 (SSA).
- Can self-employed workers get disability insurance?
- Yes — via individual policies documented with tax returns.
5 · Sources
Published industry data, checked October 2026: 1–3% of income rule (TheGlobalStatistics); $60–$150/mo at age 30, ~30% SSDI approval (One Percent Finance); 60% replacement with caps, ~$1,630 avg SSDI (CoinLaw); 90-day sweet spot (Bogleheads); 1-in-4 disability risk (SSA via LIMRA).