What method determines a disability benefit based on a percentage of the insured's pre-disability earnings?

The method that determines a disability benefit based on a percentage of the insured's pre-disability earnings is known as the Percent-of-Earnings Approach. This approach calculates the amount of disability benefit an individual will receive as a specific percentage of their earnings before the onset of the disability.

By using this method, the benefit can be more equitable, as it aligns the benefit amount with the insured's previous income level. This helps ensure that individuals maintain a more consistent standard of living despite being unable to work due to disability.

Flat Amount Method typically sets a fixed dollar value for benefits, regardless of the insured's earnings, which does not consider their income level. Group Long-Term Disability often provides a more generalized coverage and may not always be structured around the individual's earnings. The Accidental Bodily Injury Provision focuses on specific injuries resulting from accidents rather than ongoing earnings loss, thus not addressing the income-based benefit calculation. This distinction underscores why the Percent-of-Earnings Approach stands out as the correct answer for those seeking to understand how disability benefits are formulated based on pre-disability income levels.