Disability insurance coverage formula (2025 guidelines): Target benefit = 60-70% of gross monthly income (insurers cap at 60-67% to prevent over-insurance).

Example: $6,000/month gross income → Target $3,600-$4,200/month benefit.

Subtract existing coverage: (1) Social Security Disability Insurance (SSDI): Average $1,537/month (2025), but strict qualification (unable to work ANY job, 5-month wait). (2) State disability: CA/NY/NJ/RI/HI provide 6-12 months at 55-67% income (max $1,620-$1,850/week). (3) Employer group disability: Typical 60% income for long-term (LTD), 60-70% for short-term (STD). (4) Workers comp: Covers only work-related injuries (66.67% income average).

Example calculation: $6,000/month income, $3,600 target benefit.

Employer provides $2,000/month LTD (after 90-day elimination).

Gap: $3,600 - $2,000 = $1,600/month individual policy needed.

Premium: $1,600 benefit × $2.50 per $100 (age 35, office job) = $40/month.

High earners ($10k+/month): Employer group caps at $10k-$15k/month → Need supplemental individual policy for excess.

Self-employed: Need individual policy for full 60-67% coverage (no group plan).

Cost: 1-3% of annual income typical. $100k income = $1,000-$3,000/year premium.