Darrell has a group long-term disability income policy paid by his employer. Which of these statements is true?

The statement that a specified benefit amount is a percentage of Darrell's wages is correct. In group long-term disability income policies, the benefits are typically calculated as a percentage of the insured's pre-disability earnings. This percentage is often specified in the policy, making it a common feature of group long-term disability plans. The purpose of this structure is to provide a safety net that helps replace a portion of an employee's income if they become disabled and unable to work for an extended period.

The other statements do not accurately describe the typical characteristics of group long-term disability policies. For instance, benefits from employer-paid disability policies are generally taxable to the employee because the employer deducts the premiums as a business expense. Therefore, any benefits received would not be tax-free. Regarding the tax deductibility of premiums, the employer can often deduct these premiums from their taxable income. Additionally, long-term disability policies frequently coordinate with Social Security benefits to provide a more comprehensive safety net, ensuring that total benefits from both sources do not exceed certain limits or percentages of pre-disability income.