myUSFinance

1. Enter your Annual Income ($) — This value represents your annual income
2. Enter your Coverage Percentage (%) — This value represents your coverage percentage
3. Enter your Waiting Period (days) — This value represents your waiting period (days
4. Enter your Benefit Duration (months) — This value represents your benefit duration (months
5. Click Calculate — Review your results in the output section below the form. The calculator instantly computes all values based on your inputs.
6. Adjust and Compare — Modify any input to see how changes affect the result. Try different scenarios to find the optimal approach for your situation.

All calculations are performed instantly in your browser. Your data is never sent to any server or stored anywhere — your financial information remains completely private.

Where:

• Essential Monthly Expenses — Housing, food, utilities, insurance, debt payments, and other necessities
• Other Income Sources — Spouse income, investment income, Social Security disability, employer coverage
• Benefit Period — How long benefits will be paid (2 years, 5 years, to age 65)
• Elimination Period — Waiting period before benefits begin (30, 60, 90, or 180 days)

Worked Example

Monthly expenses: $5,000. Spouse income: $2,000. SSDI estimate: $1,500. Gap = $5,000 - $2,000 - $1,500 = $1,500/month needed. Annual income $80,000: premium ≈ $800-2,400/year depending on occupation and terms.

Limitations and Assumptions

Own-occupation policies pay if you cannot perform your specific job. Any-occupation policies only pay if you cannot perform any job. Own-occupation provides much better protection, especially for specialized professionals. Longer elimination periods (90-180 days) significantly reduce premiums — bridge the gap with your emergency fund.

Understanding the following key concepts will help you interpret your results and make better financial decisions:

• Principal — The initial amount of money involved in the calculation, whether it is a starting balance, loan amount, or investment.
• Interest Rate — The percentage charged or earned on the principal amount, typically expressed as an annual rate (APR). This rate determines how quickly your money grows or how much borrowing costs.
• Compounding — The process of earning interest on previously earned interest. More frequent compounding (daily vs. monthly vs. annually) results in higher effective returns or costs.
• Time Horizon — The length of time over which the calculation applies. Longer time horizons amplify the effects of compounding and small differences in rates.
• Present Value vs. Future Value — Present value is what money is worth today; future value is what it will be worth at a specific point in the future, accounting for growth or inflation.

These concepts form the foundation of virtually all financial calculations. Understanding how they interact helps you evaluate any financial product or decision with confidence.

Let's compare insurance options for a practical scenario.

Scenario: The Johnson family is reviewing their insurance coverage. They want to understand the cost implications of different coverage levels and deductibles.

Option A — Lower Deductible: $500 deductible with a $2,400 annual premium. If they file one claim of $3,000 during the year, their out-of-pocket cost is $500 + $2,400 = $2,900.

Option B — Higher Deductible: $1,500 deductible with a $1,800 annual premium. With the same $3,000 claim, their out-of-pocket cost is $1,500 + $1,800 = $3,300.

In a year with a claim, Option A saves $400. But in a year without claims, Option B saves $600 in premiums. Since most families file claims infrequently, Option B often results in lower total costs over time. Over five years with one claim, Option B saves $2,000 net ($600 × 5 years - $400 claim difference = $2,600 savings).

The optimal deductible depends on your emergency fund and risk tolerance. This calculator helps you model these scenarios with your specific numbers.