If you have your own individual disability insurance policy, then the insurance carrier decides how much of a monthly benefit they will provide to you during the underwriting process, i.e., when you apply for the policy. Basically, insurance carriers will sell you disability insurance up to about 60% to 70% of your income at the time you apply for the policy. But, each company has its own underwriting guidelines so the actual amount can vary.
If you receive your disability insurance through your employer's long term disability plan, then those plans typically provide a benefit of 50% to 70% (60% and 66.667% being the most common) of your pre-disability income. From this amount, the insurance company then subtracts the benefit amounts you receive from other sources, e.g., Social Security Disability, Workers' Compensation, a disability pension, etc. Of course, all of this depends on the exact terms of your employer's disability plan.
When it comes to New York's statutory short-term disability benefits, those are equal to 50% of your pre-disability income, but the benefit is capped at $170 per week. And, you only get 26 weeks of benefits.
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I have never tried to figure out how the insurance companies actually calculate all these things. Not every point is made clear if someone tries to learn and ask an agent and also every carrier is having up their own policy terms and techniques. But thanks for throwing light in this area and sharing the basic method.
ReplyDeletesmall business insurance