MMC Benefits Handbook
How the Plan Works
The Individual Disability Insurance Plan provides an additional level of income replacement for eligible insurable income if you elect coverage. Approved benefits begin to be paid after you satisfy the 180 day elimination period (waiting period) after the date you become disabled.
The Plan offers two coverage options: (1) maximum coverage option: 60% of monthly eligible insurable income, up to a monthly maximum of $15,000, (2) 50% of your monthly maximum IDI benefit. If you are approved by the Claims Administrator, the Plan provides you with the monthly benefit stated in your Individual Disability Insurance policy.
Importantly, the calculation of the Individual Disability Insurance benefit payable to you upon a disability is automatically reduced by the value of benefits offered under the Marsh & McLennan Companies Basic Long Term Disability Plan (Basic LTD), Optional Long Term Disability Plan (Optional LTD) and Long Term Disability Bonus Income Plan (Bonus LTD), regardless of whether you participate in the Optional LTD and Bonus LTD plans.
How is the Individual Disability Insurance benefit calculated?
Your Individual Disability Insurance Plan benefit is calculated based on 60% of your Eligible Insurable Income less the value of benefits offered under the Marsh & McLennan Companies Basic Long Term Disability, Optional Long Term Disability and Long Term Disability Bonus Income plans (collectively, Marsh & McLennan Companies Group LTD), up to a maximum of $15,000 per month. The calculation uses a Bonus LTD assumption of an election for coverage of 100% of your bonus.
Below is an example of the Individual Disability Insurance calculation for a colleague with Eligible Insurable Income that includes an annual base salary of $500,000, an eligible bonus under Bonus LTD of $500,000 and no commissions.
Sample Individual Disability Insurance Benefit Calculation
Base Salary: $500,000
Bonus: $500,000
Commissions: $0
A.
Total Eligible Insurable Income
$1,000,000
B.
IDI Benefits Percentage
60%
C.
Total Annual Individual Disability Insurance Plan Benefit (A x B)
$600,000
D.
Total Monthly Individual Disability Insurance Plan Benefit (C/12)
$50,000
E.
Monthly Marsh & McLennan Companies Group LTD Benefit*+
$40,000
F.
Total Monthly Individual Disability Insurance Plan Benefit Minus Total Marsh & McLennan Companies Monthly Group LTD Benefit (D - E)
$10,000
G.
Option 1: Individual Disability Insurance Plan Monthly Maximum Coverage Option Benefit
$10,000
 
Option 2: Individual Disability Insurance Plan Monthly Reduced Coverage Option Benefit
$5,000
* Marsh & McLennan Companies Basic LTD = Annual Salary of $500,000 * 40%/12 = $16,666
Marsh & McLennan Companies Optional LTD = Annual Salary of $500,000 * 20%/12 = $8,333
Marsh & McLennan Companies Bonus LTD+ = Bonus of $300,000 * 60%/12 = $15,000
+ Bonus LTD covers bonuses up to a maximum of $300,000, so $200,000 of the $500,000 bonus is not eligible under Bonus LTD. Bonus LTD's maximum monthly payment is $15,000.
Total Marsh & McLennan Companies Group LTD Benefits = $40,000 ($16,666 + $8,333 + $15,000)
Why is my Individual Disability Insurance benefit calculation reduced by the value of benefits offered under Marsh & McLennan Companies Group LTD?
It is industry standard for disability insurance like Individual Disability Insurance to reduce the Individual Disability Insurance benefit by group plan benefits when Individual Disability Insurance is offered through an employer, such as Marsh & McLennan Companies.
Can I still elect to enroll in Individual Disability Insurance if I am not enrolled in the Marsh & McLennan Companies Optional LTD and Bonus LTD plans?
Yes. You are still eligible to elect an Individual Disability Insurance benefit. Your Individual Disability Insurance benefit will be calculated as if you were enrolled in all three Marsh & McLennan Companies Group LTD plans.
Can my Individual Disability Insurance benefit be calculated without a reduction of Marsh & McLennan Companies' Group Optional Long Term Disability and Long Term Disability Bonus Income plans?
No. The calculation of your Individual Disability Insurance benefit automatically is reduced by the value of benefits offered under Marsh & McLennan Companies Group LTD plans, regardless of whether you participate in the Optional LTD and Bonus LTD plans. The calculation uses a Bonus LTD assumption of an election for coverage of 100% of your bonus.
What factors are taken into consideration for the determination of the Individual Disability Insurance benefit?
The Individual Disability Insurance benefit is based on age, coverage amount (which is based on your Eligible Insurable Income), occupation and tobacco use.