What is true about reimbursement under SSDI and PLTDI plans?

Reimbursement under Social Security Disability Insurance (SSDI) and Private Long-Term Disability Insurance (PLTDI) plans is structured differently, particularly in terms of the amounts they replace regarding predisability income. The correct answer highlights that PLTDI plans typically provide a higher replacement percentage of income compared to SSDI.

SSDI benefits are designed to replace a portion of the income lost due to disability, generally averaging around 40% to 60% of predisability earnings, depending on the individual’s work history and the calculation of their Average Indexed Monthly Earnings (AIME). This means that for many individuals, SSDI may not fully cover their previous income levels.

In contrast, PLTDI plans are often structured to provide a higher percentage of income replacement, frequently ranging from 60% to 80% of predisability income. This is particularly beneficial for individuals with higher income levels, as PLTDI plans can offer more robust coverage tailored to maintain their lifestyle after a disability.

The coordination of benefits for high earners isn't explicitly defined or guaranteed under SSDI, as it is more standardized across various income brackets. Therefore, the ability of PLTDI to offer higher benefits and potentially coordinate better for those with higher incomes supports the accuracy of the