PROTECTION DECISION SYSTEM

Disability insurance: insure the income the household cannot replace.

Employer coverage, a policy label and a benefit amount are not enough. Definition, taxation, caps, exclusions and duration determine whether the plan works.

MEASURE THE EXPOSURE

Collect the inputs before shopping.

01

Monthly essential spending, saving and benefit costs dependent on earned income

02

Employer certificate showing definition, cap, waiting period, duration and taxation

03

Individual policy definitions, riders, exclusions and future-increase rights

04

Other income reliably available during a long disability

DECISION MAP

Match the protection to the risk retained.

Decision map
Situation	Evidence	Action
Group benefit looks sufficient	Headline percentage ignores cap or tax.	Calculate the actual after-tax monthly benefit and subtract it from required cash flow.
Specialized occupation	Loss of specialty duties may not meet a broad disability definition.	Compare own-occupation language and partial/residual benefits in the contract.
Reserve cannot cover waiting period	Benefits begin after available cash is exhausted.	Adjust reserve or elimination period; do not solve one gap by creating another.

ORDER OF OPERATIONS

Build the protection file.

Measure

Calculate the monthly income-replacement need.

Translate

Translate every existing benefit into after-tax dollars.

Compare

Compare policy definitions and exclusions, not company names.

Document

Fund the remaining gap and schedule future coverage reviews.

Use the contract, not the pitch.

Policy language and state law control. Use licensed professionals for coverage details and qualified legal or tax counsel when ownership, business activity, dependents or estate consequences materially change the result.

YOUR NEXT MOVE

Close the income-replacement gap using the actual policy language.

Verify the benefit cap, tax treatment, waiting period, offsets, occupation definition, exclusions, and portability before counting the coverage.

Monthly income-replacement need is calculated.

Employer benefit cap and tax treatment are verified.

Definition of disability is read from the policy.

Waiting period matches available reserves.

Exclusions, riders and benefit duration are documented.

Coverage can grow with future income where needed.

PRIMARY REFERENCES

Verify current rules and contracts.

NEXT DECISION