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Team Cocco Financial Planning

Disability & Health Insurance Report

IFR Module 218 -- Disability Income Assessment

Your ability to earn income is your most valuable financial asset. A 35-year-old earning $75,000/year will earn over $3 million by age 65. Disability income insurance protects that asset just as homeowners insurance protects your home. This report assesses your current disability protection and identifies gaps.

Disability Statistics -- The Reality

Current AgeOdds of Disability (before 65)Avg DurationImpact
Age 301 in 332 monthsLoss of $200,000+ in earnings
Age 403 in 1042 monthsLoss of $262,500+ in earnings
Age 505 in 2250 monthsLoss of $312,500+ in earnings
Source: Commissioners Individual Disability Tables. Impact assumes $75,000 annual income.

Myths vs. Reality

Myth "Workers' comp will cover me if I get hurt."
Reality Workers' compensation ONLY covers injuries that occur on the job. It does NOT cover illnesses (cancer, heart disease, mental health) which account for over 90% of long-term disabilities. If you slip on ice in your driveway, workers' comp pays nothing.
Myth "Social Security Disability will replace my income."
Reality Over 65% of initial SSDI applications are denied. The average monthly SSDI benefit is approximately $1,537 -- far less than most professionals earn. The definition is "total disability" meaning you cannot perform ANY gainful work. The approval process can take 3-24 months.
Myth "Disabilities only happen from accidents."
Reality Over 90% of long-term disabilities are caused by illness, not accidents. Back problems, cancer, heart disease, diabetes, and mental health conditions are the leading causes. These are exactly the conditions workers' comp does not cover.
Myth "I have savings -- I can self-insure."
Reality The average long-term disability lasts over 2.5 years. At $6,250/month ($75K income), that is over $187,500 in lost income -- not including increased medical costs. Most Americans have less than $10,000 in savings. Even well-funded emergency funds are exhausted in months, not years.
Myth "My employer provides disability coverage -- I'm fine."
Reality Employer-paid group DI typically replaces only 60% of base salary (excluding bonuses, commissions), is taxable as income (reducing the net benefit to ~40%), is not portable if you leave the employer, and often has an "any occupation" definition after 24 months. You may need supplemental individual coverage.

Current Coverage Assessment

Employer Group Coverage

Personal / Individual Coverage

The Ideal DI Policy -- Feature Checklist

Check each feature that your current coverage provides. Unchecked items represent potential gaps in your protection.

Benefits are received tax-free
When you pay premiums with after-tax dollars, benefits are income tax free
Benefits pay for life (or to age 65+)
Long benefit period ensures coverage through recovery, not just a fixed term
Covers ALL earned income (base + bonus + commissions)
Not limited to base salary -- includes total compensation
Covers partial / residual disability
Pays proportional benefit when you can work but at reduced capacity or earnings
True Own Occupation definition
You are disabled if you cannot perform the duties of YOUR specific occupation
Cost-of-Living Adjustment (COLA) rider
Benefits increase annually with inflation to maintain purchasing power
Future Increase Option (FIO) rider
Allows you to increase coverage as income grows without new medical underwriting
Non-cancelable and guaranteed renewable
Company cannot cancel or raise premiums as long as you pay on time
Waiver of premium while disabled
Premiums are waived during the period you are receiving disability benefits
Catastrophic disability benefit rider
Additional benefit for severe disabilities requiring assistance with daily living activities

Overall Assessment

Report Summary

$0
Annual Income
$0
Monthly DI Benefit
0%
Replacement Ratio
0/10
Ideal Features Met
0%
Protection Score