Choosing Your Monthly Benefit Amount
If you become disabled, your D.C. Long Term Disability Insurance Plan coverage, issued by The Prudential Insurance Company of America, will be important. The monthly benefits you receive can help cover everything from your mortgage and regular bills to groceries and necessities for your family, in addition to costs related to your disability.
It’s important to make sure you’ve selected the right amount for your individual needs. Determining that amount does not have to be difficult; follow these steps:
- You should choose an amount that is not more than 60% of your monthly earnings at enrollment when combined with any other group or individual disability insurance you have.
- Determine your monthly earnings:
Monthly earnings means: Your average gross monthly income as reported on your IRS federal income tax returns for the two year period just prior to your date of enrollment. It includes salary, profits, fees, commissions, bonuses, and other compensation for professional services. It does not include investment returns, rent, royalties or other like income not directly produced by your occupation. Earnings are determined after deduction of normal business expenses and losses, but before deduction of any income taxes.
- Multiply your monthly earnings by 12 for your annual income. (Keep in mind that your monthly benefit amount may be reduced by other deductible sources of income you qualify for, such as Social Security, Workers’ Compensation, retirement benefits and other disability income benefits.)
Note: Your monthly benefit amount can remain the same level all the way to your first renewal date after age 60, as long as it does not exceed 60% of your monthly earnings when combined with other group or disability insurance income. On the first renewal date after age 60, your maximum monthly benefit amount will decrease to $2,500. (Your premium will be adjusted accordingly.)
We recommend you talk with your personal tax advisor or financial planner for assistance in choosing your monthly benefit amount and to discuss how benefits received under this plan may be taxable.
Long Term Disability Insurance
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