Question

Oliver's employer will pay 50% of his long-term disability insurance premiums if he elects this coverage. If he is healthy, in a low-risk job, and makes $120,000 a year, how much would Oliver expect to pay for coverage?

a) $60,000
b) $30,000
c) $90,000
d) $120,000

Answer 1

The question requires calculating Oliver's cost for long-term disability insurance but lacks the premium rate; the provided options are incorrect as they represent his salary, not the premium. Typical insurance premiums are much lower, similar to the example premium of $1,860 annually.

Step-by-step explanation:

The question pertains to calculating the cost of long-term disability insurance premiums for Oliver. Since the employer will pay 50% of the premium, Oliver is responsible for the remaining half. Without specific premium rates mentioned for disability insurance coverage for someone making $120,000 a year, it is not possible to calculate the exact amount Oliver would expect to pay. However, given the options provided, which are far higher than typical insurance premiums and considering the average benefit paid is around $1,200 monthly, we can infer that those figures represent Oliver's annual salary and not the premium amounts. Therefore, none of the options a) $60,000 b) $30,000 c) $90,000 d) $120,000 are reasonable insurance premium amounts. A more typical premium cost would be closer to the example given, where each individual pays $1,860 annually in a pool setup by an insurance company.