# Worked Example — Disability Insurance Decoder

A gold-standard run of this skill: a surgeon-adjacent specialist who believes she has "60% coverage" discovers the real number is closer to 31% — and that the definition protecting her occupation expires at month 24.

## The brief

Priya is a sonographer earning $118,000 — $92,000 base + ~$26,000 in shift differentials and overtime. Her employer's group LTD certificate says: benefit "60% of monthly earnings," where earnings are defined as "basic monthly salary, excluding overtime, bonuses, and differentials"; definition of disability: "unable to perform the material duties of **your own occupation** for the first 24 months; thereafter, unable to perform **any occupation** for which you are reasonably suited by education, training, or experience"; benefits reduced by "Other Income Benefits including Social Security disability, state disability, and workers' compensation"; mental-health and self-reported-symptom claims capped at 24 months; elimination period 90 days; premium: employer-paid. Her emergency fund covers about six weeks. She asks: "I have the 60% plan, right? So I'd get around $5,900 a month?"

## The output

### Disability Coverage Decode: employer group LTD

**1. The verdict** — No — the realistic number is roughly **$3,000–3,700/month, not $5,900**, and possibly less after offsets; the own-occupation protection that matters most to a hands-on specialist **switches off at month 24**; and the 90-day elimination period is 48 days longer than your emergency fund. This is a decent group plan being read for the first time — the gaps are namable and two are fixable.

**2. Definition decode**

| Clause | The policy's words (quoted) | What it means when claiming | Severity |
|---|---|---|---|
| Earnings | "basic monthly salary, excluding overtime, bonuses, and differentials" | 60% applies to $92k, not $118k → the base benefit is $4,600/mo, and 22% of your income was never covered | 🔴 |
| Definition switch | "own occupation for the first 24 months; thereafter, any occupation" | Months 1–24: can't do sonography = disabled. Month 25+: if you could do *any* suited job, benefits stop — the clause that ends claims for specialists who could, say, teach | 🔴 |
| Offsets | "reduced by… Social Security disability, state disability, workers' compensation" | The $4,600 is a ceiling: an SSDI award of ~$2,400 reduces the plan's payment to ~$2,200 (total stays ~$4,600) | 🔴 |
| Mental-health cap | 24-month limit | A depression or chronic-fatigue claim ends at 2 years regardless | 🟡 |
| Elimination period | 90 days | First payment ~month 4 — vs. a 6-week emergency fund | 🟡 |

**3. The benefit math** — Stated: "60%" → applied to base only: **$4,600/mo** → offsets: ceiling, not floor (SSDI example above) → taxes: employer-paid premium generally means **benefits are taxable** `[verify — premium-payer rules vary by jurisdiction and arrangement]` → realistic net ≈ **$3,000–3,700/mo** against real monthly expenses of [hers]. The honest coverage ratio on her *actual* $118k income: ~31–38%, not 60%.

**4. 🚩 Red flags, ranked** — (1) the base-only earnings definition for a 22%-variable earner; (2) the 24-month own-occ switch for a hands-on specialist; (3) offset stacking; (4) the elimination-period-vs-emergency-fund gap.

**5. The reliance checklist** — confirm in writing: the earnings definition and whether differentials can be covered (some plans offer buy-up tiers); the exact switch date mechanics; the offset list; tax treatment. The gap a supplemental individual own-occupation policy would need to fill: ~$2,000–2,900/month, own-occ to retirement age, on her full income — described as the shopping list, not sold. Emergency fund: extend toward 90 days ([emergency-fund](../../emergency-fund/SKILL.md) has the math).

*"This is a plain-language reading, not legal/financial advice — laws vary by jurisdiction; confirm anything load-bearing with a qualified professional."*

## Why it's shaped this way

- **The verdict answers her actual question first** — "I'd get $5,900, right?" — with the corrected number and the three reasons, because the gap between believed and real coverage *is* this skill's product.
- **Every definition is quoted verbatim before being translated** — "basic monthly salary, excluding…" does the persuading; paraphrase would sound like opinion. That's the definitions-first rule the skill is built on.
- **The math ran all the way to a net monthly number against her income shape** — 60% → base-only → offsets-as-ceiling → tax flag → ~31–38% real coverage; stopping at any intermediate number would have left the illusion partially intact.
- **The own-occ switch got specialist framing** — for a sonographer, "any occupation you're suited for" is the difference between covered and not, per the framework's it-bites-specialists-hardest note.
- **The tax line is flagged, not asserted** — premium-payer tax treatment varies; the decode marks it `[verify]` while still using it to bound the realistic range.
- **The fix list is a shopping description, not a sale** — buy-up tiers, a supplemental own-occ policy, the emergency-fund extension — named with sizes, routed to professionals, per the do-not-sell anti-pattern.