Benefit Calculation database

Benefit Calculations

The arithmetic behind the monthly check — replacement ratios, the taxed-vs-untaxed difference, bonus and commission treatment, and how offsets shrink the real number.

Core benefit 1 Definition 1 Income definition 1 Partial 1 Rider 1

Benefit Calculation

Cost of living (COLA) riders: How the Monthly Number Is Actually Calculated

Cost of living (COLA) riders: basis = n/a, ratio 3% simple or cpi-u, taxed same.

Wage basis N/AReplacement ratio 3% simple or CPI-UTax treatment Same

Benefit Calculation

Residual (partial) disability benefits: How the Monthly Number Is Actually Calculated

Residual (partial) disability benefits: basis = pre-disability vs current earnings, ratio 50% of loss, taxed follows primary claim.

Wage basis Pre-disability vs current earningsReplacement ratio 50% of lossTax treatment Follows primary claim

Benefit Calculation

Own-occupation vs any-occupation payment: How the Monthly Number Is Actually Calculated

Own-occupation vs any-occupation payment: basis = n/a, ratio own-occ pays more, longer, taxed same taxation.

Wage basis N/AReplacement ratio Own-occ pays more, longerTax treatment Same taxation

Benefit Calculation

Bonus and commission income: How the Monthly Number Is Actually Calculated

Bonus and commission income: basis = documented 2-year average, ratio often excluded or capped, taxed varies.

Wage basis Documented 2-year averageReplacement ratio Often excluded or cappedTax treatment Varies

Benefit Calculation

Base salary replacement: How the Monthly Number Is Actually Calculated

Base salary replacement: basis = base w-2 salary, ratio 60% typical, taxed taxed if employer-paid.

Wage basis Base W-2 salaryReplacement ratio 60% typicalTax treatment Taxed if employer-paid

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