According to multiple sources (such as The Commissioners Disability Tables), the average disability that goes to a claim lasts 2.5 years. Let’s do some math on this, using my degenerate gambler’s sense of probability and expected returns.

Assume that you are a young professional making $60k per year. So this is a $5k per month gross income, which many insurance companies will insure for disability purposes at 90%, or $4,500 of after tax income. 30 months of disability is thus $135,000 (assuming no indexing for inflation). So this is the average risk for a young professional.

Assuming that there is a one in four chance of being disabled, that means the expected value is $33,750. Now let’s see the cost of getting this coverage. Checking with some of my buddies that right disability insurance, we can assume about $600 a year for this coverage. Dividing the expected value ($33.75k) by the cost ($600/year), we get 56.25, which is the number of years it would take for the cost to exceed the expected value.

Fifty six years s obviously longer than the average working career. What does this tell us?

From a mathematical perspective, buying disability insurance is a good bet.