AICPA Insurance Programs

Long Term Disability Income Plan
Frequently Asked Questions

I already have disability coverage through my employer. Why would I need more coverage?

You may have coverage through your employer but many employer-sponsored plans only pay 30-40% of your salary. It is likely that your benefit would not be enough to cover your current financial obligations let alone additional expenses the direct result of your disability. Consider your medical bills, any deductibles and co-pays you incur while you are disabled and either not able to earn an income or have experienced a significant loss of income. And unlike many employer plans, the AICPA LTD Plan has a "your occupation" definition of disability which allows you to qualify for benefits if you are unable to perform your current job. Plus, coverage under your employer plan may not cover you if you are partially disabled. The AICPA LTD plan gives you the option to select coverage for partial disabilities.

What does AICPA Long Term Disability Income Insurance cover?

Depending on the Option you choose, LTD insurance pays a monthly benefit if you become totally or partially disabled and are unable to earn an income. If you elect the Total and Partial Disability Income Option, it will pay you a monthly benefit if you are either totally disabled or partially disabled. The partial disability option will pay benefits if you are disabled and your disability allows you to work only part time (experience a loss of at least 20% of your monthly earnings). Both the Total Disability Option and Total and Partial Disability Option have a "your own occupation" definition which means you will receive benefits if you are unable to work in your occupation. Some disability plans only pay benefits if you are unable to work in any occupation.

Won't government-mandated programs, like Social Security, cover all my expenses?

Social Security Disability coverage is often difficult to qualify for and, even if you do qualify, you will have to wait 6 months before you can even receive your benefits.

These Social Security Disability facts may surprise you:

In 2011, only 36% of the 2.9 million workers who applied for Social Security Disability Insurance (SSDI) benefits were approved.
You must prove to the Social Security Administration that your disability prevents you from working in any profession-not just as a CPA.
The average Social Security Disability Insurance payment for disabled workers was only $1,111 per month in 2011*
Social Security Disability insurance only covers disabilities expected to last 12 months or longer-or end in death.
There is a 6-month waiting period for Social Security Disability benefits.
Social Security Disability benefits are subject to federal income tax with the amount includable in income based on total amount of gross income (including tax exempt income).

*Social Security Administration, Disabled Worker Beneficiary Statistics, ssa.gov

How much LTD insurance do I need?

You should consider the amount you will need to help cover your current monthly expenses plus any additional medical bills and/or co-pays that you may incur if you become disabled and are unable to earn an income. Click here to use the Insurance Needs calculator to find out how much LTD insurance you may need.

What should I look for in a LTD insurance plan?

When choosing a LTD insurance plan, you should look for the following:

Affordable premium rates
A choice of monthly coverage amounts that can keep up with your increasing salary
Income Tax-free benefits
Coverage that stays with you even if you change employers
Protection against inflation
A rehabilitation provision to help you get back to your profession
An insurance company that has favorable financial ratings to ensure quality and stability.
A "your occupation" definition of total disability that allows you to receive benefits if your disability prevents you from performing your job, versus other plans that may require you to work at another occupation
Optional features--such as coverage for partial disabilities

What is the difference between the coverage offered under the Total Disability Income Option and the Total and Partial Disability Income Option?

The primary difference between the two Options is the criteria you have to meet in order to qualify for benefits while under the care of a doctor:

The Total & Partial Disability Option-coverage pays benefits if you are disabled and unable to perform the duties of your own occupation and due to your disability have experienced a loss of at least 20% of your monthly earnings. For example, if you become disabled and are still able to work part time, you can receive benefits if you elect the Total and Partial disability option.

The Total Disability Option-coverage pays benefits if you are disabled and unable to perform the duties of your own occupation.

Please note that when calculating monthly scheduled coverage amounts over $4,000 that a separate Definition of Monthly Earnings applies to each Option.

How should I determine what Option and level of coverage is most appropriate for me?

You should consider your personal and family circumstances when considering your coverage needs. As a serious disability is something most often unpredictable, you will need to assess the actual consequences for you and your family if you became disabled. Would you be able to absorb the loss of all or a significant portion of your earnings without having adequate coverage? Are higher monthly coverage amounts and/or a shorter waiting period to qualify for benefits earlier, worth the increased costs? Is having coverage for a loss of earnings due to a partial disability worth the additional costs? These are the questions that only you can answer.

Why do over 70,000 CPAs have LTD coverage through the AICPA?

CPAs have chosen the AICPA Long Term Disability Income Plan to protect themselves and their families from the financial impact of a disability. The AICPA LTD Plan includes many features not commonly found in employer and government- sponsored plans. For instance, the LTD Plan offers:

A choice between a Total Disability Income Option or Total and Partial Disability Income Option to best address your individual circumstances
Coverage that you can take with you-even if you change employers.
Coverage amounts up to $12,000/month. Up to $4,000 in monthly coverage without proof of earnings to AICPA members; up to $3,000 for State Society members
Income Tax free benefits: Under current Federal Income Tax laws, your monthly benefit is generally free from income tax (IRC Section 104 ) if your premiums are paid by you with after tax dollars.
A "your occupation" definition of disability means you won't be forced into another line of work before receiving benefits.
Choice of waiting periods; a 26-week waiting period has a lower cost; a 13-week waiting period allows benefits to begin sooner.
Other features, such as Cash Refunds, a Cost of Living Adjustment feature and Rehabilitation Program.
Coverage issued by The Prudential Insurance Company of America

What are the AICPA cash refunds?

Cash refunds are paid annually by the AICPA Insurance Trust from premium refunds received from Prudential and can lower your overall costs. Although not guaranteed, cash refunds have been paid since 1984. Click here to see the refunds for the prior year.

Will I be covered for a disability even if it occurs while traveling?

Yes, you will be covered for disabilities caused by either sickness or accident while at home or at work, everywhere you travel, during every hour of the day and night. Not covered are disabilities caused by, or contributed to by acts of war (including undeclared war and resistance to armed aggression), intentional self-inflicted injury or attempted suicide.

Will I be covered for successive disabilities?

If you receive benefits for a disability, recover, and again become disabled while covered under the Plan, the later disability may be regarded as a continuation of the prior one without an additional waiting (elimination) period having to be satisfied. However, the second disability will be considered a new one if you have been back to full-time work for at least six consecutive months, or if the second disability is due to an entirely unrelated cause and the two disabilities have been separated by an interval during which you have performed all the duties of your occupation.

When will my coverage terminate?

Coverage terminates when you attain age 70 unless you are receiving benefits. Benefits are paid in accordance with the terms of the Certificate. Earlier termination will occur if you cease to be a member of the AICPA or any State Society of CPAs, the master policy terminates or you withdraw from the Plan by so requesting or by failure to make timely payments of the required contributions to the Trust. You may also request to move to a lower monthly coverage amount if your coverage is above $1,000. If you have received benefits until your Maximum Period of Payment for your disability, you are no longer eligible to continue your coverage to age 70.

What is the Definition of Monthly Earnings?

Please see the Monthly Earnings for each Plan Option below.

Total Disability Income Option Definition of Monthly Earnings:

"Monthly earnings" will mean the greater of (1) or (2) where (1) equals one-twelfth of the average of your salary and net earned income from self-employment and trade or business activities as reported to the Internal Revenue Service (IRS) for income tax purposes for the two calendar years preceding the calendar year the request is made, and (2) equals one-twelfth of your annual salary rate in effect on the date of the request; or if the preceding item (2) is not determinable, one-twelfth of your actual earnings for the twelve calendar months immediately preceding the request; or if this is also not determinable, your actual earnings for the calendar month preceding the request. Salary, as used herein, shall be based on your earnings from your Employer(s), to include bonus and commissions, but exclusive of overtime pay, for a normal work week not exceeding forty hours. Monthly earnings shall be satisfied at the time of application and at each renewal date and at the time of claim. Residents of Puerto Rico who do not report to the IRS may substitute their submissions to the Bureau of Income Tax of the Commonwealth of Puerto Rico.
Total and Partial Disability Income Option Definition of Monthly Earnings:

"Monthly earnings" shall mean your average gross monthly income as reported on your IRS federal income tax returns for the two calendar years prior to your disability. It includes salary, profits, fees, commissions, bonuses, and other compensation received for professional and other services. Monthly earnings do not include investment returns, rent, royalties and similar types of income not directly produced as a result of your occupation. Earnings are determined after deduction of normal business expenses and losses, but before deduction of any income taxes.

What is the Future Purchase Option?

During each annual renewal period, insured participants under age 40 can elect a Future Purchase Option (FPO). This Option allows those covered before age 40 to increase their monthly coverage on an annual basis by 5% to the next $100.00 (up to a cumulative maximum of $12,000) without having to provide evidence of good health. If elected, the increased coverage amount will be effective January 1st. The Option will expire if you decline it two years in a row, or at age 40.

Apply Now

Issued by The Prudential Insurance Company of America.

Long Term Disability Income Plan Frequently Asked Questions

Personal Insurance

Long Term Disability Income

Long Term Disability Income Plan
Frequently Asked Questions