Key Employee Disability Calculator
Calculate disability coverage for key revenue-generating employees to protect the business from income loss during disability.
Financial Disclaimer
This calculator is for educational purposes only and does not constitute financial advice. Results are estimates based on the inputs provided. Consult a qualified financial advisor before making investment or financial planning decisions.
Inputs
Results
Monthly Disability Benefit
$7,500.00
≈ 8 smartphones
How to Use This Calculator
- Enter the key employee's annual salary.
- Set the benefit period and elimination (waiting) period.
- Input the percentage of salary to be replaced.
- Review the estimated monthly disability benefit and annual premium.
- Business-overhead disability insurance can also be layered to cover fixed operating costs during a disability.
How the result changes with Key Employee Annual Salary
| Key Employee Annual Salary | Monthly Disability Benefit |
|---|---|
| $127,000.00 | $6,350.00 |
| $369,500.00 | $18,475.00 |
| $660,500.00 | $33,025.00 |
| $903,000.00 | $45,150.00 |
What each input means
- Key Employee Annual Salary
- Annual compensation of the key employee.
- Revenue Attribution
- Percentage of company revenue attributable to this employee.
- Company Annual Revenue
- Total company annual revenue.
- Benefit Percentage
- Percentage of salary covered by disability. Typically 60% of pre-disability income.
- Waiting (Elimination) Period
- Days before benefits begin. Longer waiting periods lower premiums.
- Benefit Duration
- How long benefits are paid. Typically 12-60 months.
How this is calculated
Worked example, using the default values
- Identify Input Parameters4 parametersKey Employee Annual Salary = 150000, Revenue Attribution = 20, Company Annual Revenue = 2000000, Benefit Percentage = 60 = 6 input(s) provided
- Calculate Monthly Disability BenefitMonthly Disability Benefit7500 = $7,500
- Calculate Total Benefit CoverageTotal Benefit Coverage180000 = $180,000
- Calculate Monthly PremiumMonthly Premium202.5 = $202.5
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