b. Jeremy, works as an IT manager at a pharmacy chain store, has a monthly take-home pay of $50,000. He has bought an individual disability-income insurance policy that will pay him $30,000 monthly if he is totally disabled. In addition to the 30-days (1-month) waiting period condition, this disabilityincome insurance policy also contains a residual disability benefits provision with coverage to age 65. In relation to Jeremys disability income policy: The definition of total disability is stated as the complete inability of the insured to perform each duty of his or her own occupation. Residual disability means that the insured is engaged in his/her regular or another occupation, and his/her income is reduced because of an accident or sickness by at least 25 percent of his/her prior income. Further, this policy considers a loss of earned income more than 70 percent to be a loss of 100 percent, in which case the full monthly benefit for total disability is paid.

i. If Jeremy is severely injured in a motor bike accident and cannot work for 5- months, what is the amount of disability income that Jeremy can collect form his disability-income insurance policy? Show all your calculations. 3 marks

ii. Suppose that Jeremy returns to work but can only work part-time until his full recovery. If he earns $25,000 monthly, what is the amount of disability income (if any) that Jeremy can collect from his insurance policy? Show all your calculations. 4 marks

iii. Suppose that Jeremy returns to work but can only work part-time until his full recovery. If he earns $10,000 monthly, what is the amount of disability income (if any) that Jeremy can collect from his insurance policy. Show all your calculations. 4 marks