Mississippi Property & Casualty Practice Exam

What percentage of total disability benefits is typically provided after the waiting period?

1. 50%

2. 66 2/3%

3. 80%

4. 100%

The correct answer is: 66 2/3%

The answer of 66 2/3% is correct because this is the standard percentage of total disability benefits offered by most disability insurance policies after the waiting period has elapsed. This structure is designed to provide a significant amount of replacement income for individuals who are unable to work due to a disability. In practice, this percentage allows the insured to maintain a reasonable standard of living while they are unable to earn their typical income. The reasoning behind this specific figure is that it strikes a balance between providing substantial financial support and encouraging individuals to return to work when they are able. Other common percentages such as 50%, 80%, or even 100% are less frequently seen in standard disability policies. For example, while some short-term disability plans may offer a higher percentage up to 80% or even 100% for a limited period, most long-term disability benefits adhere to the 66 2/3% figure, particularly to align with regulations and actuarial principles governing disability insurance. Understanding this percentage is crucial for individuals assessing their disability coverage options and ensuring they have adequate protection against loss of income due to unforeseen circumstances.