Joe is applying for loss-of-time disability coverage and is concerned about how his income affects his benefits. Why does Joe's application for loss-of-time coverage inquire about his income?
A. To determine his ability to pay premiums.
B. To set benefits so they do not exceed his after-tax income.
C. To decide whether to approve his application.
D. To calculate his tax obligations.
Answer (2)
Joe's application for loss-of-time disability coverage inquires about his income primarily to ensure the benefits do not exceed his after-tax income. This approach helps maintain his standard of living during his recovery. The insurance company determines the appropriate benefit amount based on his earnings. ;
Joe's application for loss-of-time disability coverage asks about his income primarily to set benefits so they do not exceed his after-tax income. This helps to ensure he maintains his standard of living during his recovery. The correct answer is option B.
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