Final answer:
Orlando's disability policy has a $5,000 base benefit and a $1,000 SIS offset benefit. He will receive $700 in Social Security benefits, which will reduce his insurance payout. Therefore, Orlando will receive $4,300 from the insurance company after Social Security benefits begin.
Step-by-step explanation:
Orlando has a disability policy with a base benefit of $5,000 and an SIS offset benefit of $1,000. When Orlando becomes disabled, he is deemed eligible for Social Security disability benefits and he starts to receive $700. To calculate the amount Orlando will receive from his insurance company after his Social Security benefits begin, we need to adjust his insurance payout by the amount of his Social Security benefit.
The SIS offset means that once Orlando begins to receive Social Security benefits, the amount he receives from Social Security will reduce the amount the insurance company pays out. However, Orlando's Social Security benefit of $700 is less than the SIS offset of $1,000. Thus, his insurance payout will only be reduced by $700, which is the actual amount of Social Security benefit he received.
The calculation of the new insurance payout after adjusting for Social Security benefits is therefore $5,000 - $700 = $4,300. This is the amount Orlando will receive from the insurance company after his Social Security benefits begin.