Question

Diane, an ER surgeon, buys a disability policy with a base benefit of $6,000 and as SIS offset benefit of $1,200. Diane becomes disabled and eventually receives $1,000 in Social Security disability benefits. How much will she receive from the insurance company initially?

A) $4,800
B) $6,000
C) $6,200
D) $7,200

Answer 1

Diane will receive $6,200 initially from the insurance company; this amount is her policy's base benefit plus the SIS offset benefit, minus the Social Security disability benefits she receives.

Step-by-step explanation:

When Diane, an ER surgeon, becomes disabled, she starts receiving Social Security disability benefits of $1,000. She has a disability policy with a base benefit of $6,000 and an SIS (Social Security Income) offset benefit of $1,200. The amount Diane will receive from the insurance company initially is calculated by subtracting her Social Security benefit from her total policy benefit, including the SIS offset benefit. Therefore, the initial payout from the insurance company would be her base benefit of $6,000 plus the SIS offset benefit of $1,200, minus the $1,000 she receives from Social Security, resulting in a total of $6,200.