A salary percentage requirement is a common feature of long term disability insurance policies that specifies the amount of income that an insured individual must have lost in order to be eligible for disability benefits.
The salary percentage requirement is usually expressed as a percentage of the individual’s pre-disability income, typically ranging from 50% to 80%. This means that in order to be eligible for benefits, the individual must have experienced a loss of income equal to or exceeding the percentage specified in the policy. For example, if the policy has a 60% salary percentage requirement, the individual must have experienced a loss of income of at least 60% due to a covered disability in order to be eligible for benefits.
The salary percentage requirement is used to ensure that disability benefits are provided only to individuals who have experienced a significant loss of income due to a disability, rather than to those who are able to continue working at a reduced capacity or who have other sources of income.
It is important to carefully review the salary percentage requirement of a long term disability insurance policy before purchasing the policy, as this requirement can affect the amount of benefits that an individual is eligible to receive. Some policies may also have additional requirements or restrictions on the type or duration of disability that is covered, so it is important to review the entire policy and understand all of its terms and conditions.