A client has the following information:

$$80,000$ Gross Income

Monthly Outflows of $$4,000$

Savings of $28,000$

Assume a tax rate of $25\%.$

Part $1$

What is the expected monthly benefit amount that the client will be eligible to purchase?

$$4,333$

$$5,000$

$$3,333$

Part $2$

The client pays the premium on the disability insurance on a post$-$tax basis. If the client becomes disabled and receives monthly benefits, how much will the client receive?

The full monthly benefit

The full monthly benefit reduced by $25\%$ for taxes.

Part $3$

What sort of Elimination Period would you recommend for this client?

$3$ months

$12$ months

$6$ months

Part $4$

The client wants the definition of disability that will be most likely to pay a monthly benefit in the event of a disability.

Which definition of disability covers more?

Any Occupation

Portability

Own Occupation

Decreasing Premium

Increasing Premium