Q: Who is eligible to request coverage?
A: You can request coverage if you’re under age 65, a member of the AICPA, a State Society of CPAs, and living in the United States, Puerto Rico, the U.S. Virgin Islands, or Guam.
Q: I already have disability coverage through my employer. Why would I need any more?
A: Many employer-sponsored plans pay only a limited portion of your salary, which might not be enough to cover your financial obligations and expenses if you’re disabled. Our members are encountering a changing environment where their employer-provided benefits may be lessening. The AICPA LTD Income Plan provides coverage for partial disability, goes with you when you change jobs, and offers features not commonly found in employer and government-sponsored plans, such as:
A “your occupation” definition of disability that pays benefits if you’re unable to perform the duties of your occupation—not just any occupation.
Benefits for life if you’re totally disabled before age 50; up to age 67 if you’re totally disabled at age 50-64; up to two years if you’re totally disabled at age 65 through 69.
No offsets to your benefits based on other benefits you may receive.
Coverage up to age 70 (Many other LTD plans end coverage at 65)
Tax-free benefits: Under current Federal Income Tax rules, your monthly benefit is generally free from income tax because premiums are paid with after tax dollars (IRC Section 104). Many employer-paid benefits are fully taxable, lowering your actual benefit amount.
Higher benefit amounts: AICPA members can request up to $12,000/month, depending on earnings and other disability coverage.
Q: Won't Social Security or other government programs cover my expenses?
A: It’s often difficult to qualify for Social Security Disability coverage. Even if you do, you’ll have to wait six months before you can receive benefits. You must also prove to the Social Security Administration (SSA) that your disability prevents you from working in any profession, not just as a CPA. Plus, the SSA only covers disabilities that are expected to last 12 months or longer or end in death. And such benefits are subject to federal income tax.
Q: What qualifies as a disability under the AICPA LTD Income Plan?
A: To receive AICPA LTD benefits, you must be disabled due to a sickness or injury and under the regular care of a doctor. You don’t need to be confined to home or hospital. You must also meet the definition of disability that applies to the Option you elected:
With the Total Disability Income Option, you must be unable to perform all material and substantial duties* normally required in your occupation. You also can’t work at any job for wage or profit to be considered disabled during your waiting period. (This is also known as the “elimination” period, which is the length of time between when an injury or illness occurs and you start receiving benefits).
With the Total + Partial Disability Income Option, you must be unable to perform the material and substantial duties* normally required in your occupation and have a 20% loss in your monthly earnings to be considered disabled during your waiting period. That means you can satisfy the waiting period with either a total or partial disability. If you are normally required to work more than 40 hours per week on average and you are currently working or have the capacity to work 40 hours per week, Prudential will consider this requirement to be satisfied.
*Material and substantial duties cannot be reasonably omitted or modified.
After submitting satisfactory evidence of good health and monthly earnings of $10,000, the AICPA member is approved for a coverage amount of $6,000/month under the Total and Partial Disability Option—the highest amount available based on the member’s monthly earnings ($10,000 x 65%= $6,500). The AICPA member has a partial disability and continues to work part-time.
While the member is working part-time, he/she realizes a 30% loss of earnings. The member files a claim and continues working while earning $7,000/month during the waiting period. After the claim is approved, the AICPA member receives a check for $3,000/month for the first 12 months when the waiting period is over as part of the Return to Work Incentive Program. That amount represents the member’s monthly loss of earnings due to the disability (i.e. from $10,000 to $7,000). If the member still needs benefits after this time, he/she will receive a check for $1,800/month (30% of the $6,000/month coverage amount.) The member will continue receiving the monthly payments throughout the duration period or until the member recovers from the disability.
Q: Will I be covered for a disability if I travel away from home and work?
A: Yes, you’ll not only be covered for disabilities from sickness or an accident at home or work, but also while you’re traveling – and at any time.
Q: Will I be covered for successive disabilities?
A: If you receive benefits for a disability, recover, and become disabled again while you’re still covered under the Plan, then the second disability may be regarded as a continuation of the first. And you won’t have to satisfy an additional waiting period. However, the second disability will be considered new if you were working full-time for at least six consecutive months. The second disability will also be considered new if it is the result of an entirely unrelated cause and the first and second disability have been separated by a length of time during which you have performed all the duties of your occupation.
Q: When will my coverage terminate?
A: Coverage ends when you reach age 70, unless you are receiving benefits. Benefits are paid according to the terms of the certificate. Early termination occurs if:
- you are no longer a member of the AICPA or any State Society of CPAs
- the master policy terminates
- you withdraw from the Plan voluntarily
- you fail to make timely payments of the required contributions
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.
Q: What is the definition of Monthly Earnings?
A: 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 + 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.
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