Key Employee Disability Calculator

Monthly Disability Benefit is calculated only from Key Employee Annual Salary and Benefit Percentage -- it represents the income replacement the policy pays the employee (or, in a key-person structure, the business), independent of how much revenue that employee generates. Revenue Attribution and Company Annual Revenue instead drive Monthly Revenue at Risk, a separate estimate of the business's exposure rather than the benefit amount itself.

A longer waiting period lowers Monthly Premium and Annual Premium in this model, because the insurer pays out less often (a short disability that resolves before the waiting period ends triggers no claim at all) and any claim it does pay starts later. This calculator applies that discount in discrete steps at 60, 90, and 180 days rather than a smooth curve.

Total Benefit Coverage scales directly and proportionally with Benefit Duration -- doubling the duration doubles the coverage. Annual Premium also rises with Benefit Duration, but through a separate step-based loading factor (an extra 20% at 24+ months, 50% at 60 months) layered on top of the proportional benefit increase, since a longer payout period is a larger risk for the insurer beyond just the total dollars covered.

No -- this calculator applies a simplified formula based on salary, benefit percentage, waiting period, and benefit duration only. Real disability insurance premiums also depend on the employee's health, occupation classification, industry risk, and the specific insurer's underwriting and rate tables, none of which this calculator models, so use Monthly Premium and Annual Premium to gauge the right ballpark before requesting a real quote, not in place of getting one.

It divides Monthly Revenue at Risk by the premium cost, giving a rough sense of how much revenue exposure each premium dollar is helping offset -- a higher number suggests more leverage from the policy relative to its cost. It does not, however, indicate whether Monthly Disability Benefit itself is large enough to actually replace that revenue if the key employee becomes disabled; check those two figures against each other separately.