Ch 10 - Disability Income

Which of the following elimination periods found in a disability income policy will result in the highest premium? A 1 year B 1 month C 90 days D 60 days

1 month -------- The elimination period on a disability income policy can be thought of as a "time deductible." The shorter the elimination period, the higher the premium.

An insured purchases a disability income policy with a 90 day elimination period. If a disability lasts 100 days, the insured would be entitled to receive benefits for: A 190 days B 100 days C 90 days D 10 days

10 days --- The elimination period acts like a time deductible. The insured would be eligible to receive 10 days of benefit payments. Of the 100 days he was disabled, the first 90 are eliminated, leaving the remaining 10 days eligible for claim payment.

Which of the following is a typical benefit period for a group long-term disability benefit? A 26 weeks B 5 years C 13 weeks D 52 weeks

5 years -------- Group long-term disability is often characterized by benefit periods of 2 years, 5 years, to age 65, or lifetime.

Any occupation

A definition of total disability that requires the insured to be unable to perform the duties of any occupation in which the individual is reasonable suited by education, training, and experience

Own occupation

A definition of total disability that requires the insured to be unable to perform the main duties of his/her own occupation to qualify for benefits

Nonoccupational

A policy classification providing coverage for a disability due to an injury and sickness which occurs off the job only

Occupational

A policy classification providing coverage for a disability due to injury and sickness which occurs either on or off the job

Recurrent disability

A subsequent disability occurs due to the same cause within 6 months of an insured's return to work

The cost of living rider automatically increases monthly benefits, including after the onset of a disability: A Every 3 years B Every 2 years C Annually D Semi-annually

Annually --------- The cost of living rider automatically increases monthly benefits annually, including after the onset of a disability based on the increase of the Consumer Price Index (CPI) which helps protect the insured against inflation.

Which of the following is needed to qualify for a Social Security Disability Benefit? A Have less than $1,000 in assets B Be age 60, widowed, and have one dependent C Be either currently or fully insured D Fulfill a 4-month waiting period, and have paid into Social Security

Be either currently or fully insured ---------- In addition to satisfying all other requirements, a person must be either fully insured or currently insured.

Which of the following terms best describes the maximum length of time that disability income benefits will be paid to the disabled insured? A Elimination period B Coverage period C Disability period D Benefit period

Benefit period --- The benefit period determines the amount of time a benefit will be paid. Benefits are limited by the policy's elimination period, duration of benefit, definition of disability, and any age limitations.

A disability income policy would honor a covered claim submitted by an insured in which one of the following situations? A Hazardous hobbies or occupations B War or act of war C Active duty in the military D Broken limbs during a recreational league sporting event

Broken limbs during a recreational league sporting event ---------- Common exclusions and limitations that apply to disability income policies include attempted suicide and intentional self-inflicted injuries including intoxication or misuse of prescription medication, pre-existing conditions as defined in the contract, war or act of war, active duty in the military, aviation (pilots and crew), hazardous hobbies or occupations, and foreign travel.

A disability income policy would honor a covered claim submitted by an insured in which one of the following situations? A Broken limbs during a recreational league sporting event B Active duty in the military C Hazardous hobbies or occupations D War or act of war

Broken limbs during a recreational league sporting event ------------ Common exclusions and limitations that apply to disability income policies include attempted suicide and intentional self-inflicted injuries including intoxication or misuse of prescription medication, pre-existing conditions as defined in the contract, war or act of war, active duty in the military, aviation (pilots and crew), hazardous hobbies or occupations, and foreign travel.

What type of disability income insurance pays a lump sum enabling certain businesses to cover the cost of purchasing a disabled business owner's interest in the business? A Business overhead expense B Key employee C Buy-sell D Reducing term

Buy-sell -------- Disability Buy-Sell insurance pays a lump sum benefit that enables the insured's business partners to buy out his or her interest in the business.

What type of disability income insurance pays a lump sum enabling certain businesses to cover the cost of purchasing a disabled business owner's interest in the business? A Reducing term B Key employee C Business overhead expense D Buy-sell

Buy-sell --------- Disability Buy-Sell insurance pays a lump sum benefit that enables the insured's business partners to buy out his or her interest in the business.

The State Disability Insurance (SDI) program provides short-term benefits to eligible workers who: A Are covered by two programs -- job retraining and severance pay B Are covered by two programs -- unemployment and Medi-Cal C Contribute a fixed dollar amount of their gross wages each pay period while employed D Contribute a small percentage of their gross wages each pay period up to the annual maximum

Contribute a small percentage of their gross wages each pay period up to the annual maximum

The State Disability Insurance (SDI) program provides short-term benefits to eligible workers who: A Contribute a fixed dollar amount of their gross wages each pay period while employed B Contribute a small percentage of their gross wages each pay period up to the annual maximum C Are covered by two programs -- unemployment and Medi-Cal D Are covered by two programs -- job retraining and severance pay

Contribute a small percentage of their gross wages each pay period up to the annual maximum ----- The State Disability Insurance (SDI) program provides short-term benefits to eligible workers who contribute a small percentage of their gross wages each pay period up to the annual maximum.

A Disability Income Policy has a period of deductibility immediately following a disability during which time benefits are not payable. This period is called a(n): A Elimination Period B Loss of Time C Probationary Period D Loss of Income

Elimination Period

Stephen must be disabled 60 days before he will receive any benefits from his disability policy. This 60-day period is the: A Probationary Period B Policy Period C Elimination Period D Free Look Period

Elimination Period --- The elimination period is the period of time between the onset of a disability, and the time the insured is eligible for benefits. It can be thought of as a deductible period for the policy.

A Disability Income Policy has a period of deductibility immediately following a disability during which time benefits are not payable. This period is called a(n): A Probationary Period B Elimination Period C Loss of Income D Loss of Time

Elimination Period ---- A policy may state 6 months elimination period for sickness and immediate coverage or as little as 7 days in case of an accident. Although waiting period means the same thing, elimination period is the most correct term.

Stephen must be disabled 60 days before he will receive any benefits from his disability policy. This 60-day period is the: A Probationary Period B Policy Period C Elimination Period D Free Look Period

Elimination Period ----- The elimination period is the period of time between the onset of a disability, and the time the insured is eligible for benefits. It can be thought of as a deductible period for the policy.

elimination period

Elimination period Waiting period during which an individual must be totally disabled before benefits become payable

Which optional disability income insurance rider waives the elimination period if the insured is hospitalized and pays only when the insured is being treated as an inpatient. A Impairment B Non-disabling injury C Cost-of-living D Hospital confinement

Hospital confinement -------- The hospital confinement rider waives the elimination period if the insured is hospitalized and pays only when the insured is being treated as an inpatient.

Which optional disability income insurance rider waives the elimination period if the insured is hospitalized and pays only when the insured is being treated as an inpatient. A Cost-of-living B Hospital confinement C Impairment D Non-disabling injury

Hospital confinement --------- The hospital confinement rider waives the elimination period if the insured is hospitalized and pays only when the insured is being treated as an inpatient.

Which one of the following statements regarding Workers' Compensation and Social Security Disability Income (SSDI) is false? A SSDI benefits are secondary to Workers' Compensation and any other public insurance benefits B If the total of SSDI, Workers' Compensation, and other public disability benefits exceeds 50% of the worker's pre-disability earnings, the SSDI benefit will be reduced $2 -for- $1 until the 50% limitation is reached C The individual or group benefit will be reduced dollar-for-dollar by the amount of Workers' Compensation benefits paid, so that the total disability income benefit payable from all sources combined will not exceed the amount that would be payable by the individual or group disability policy on its own D Workers' Compensation benefits are primary to either individual or group disability income benefits

If the total of SSDI, Workers' Compensation, and other public disability benefits exceeds 50% of the worker's pre-disability earnings, the SSDI benefit will be reduced $2 -for- $1 until the 50% limitation is reached ---------------- If the total of SSDI, Workers' Compensation, and other public disability benefits exceeds 80% of the worker's pre-disability earnings, the SSDI benefit will be reduced dollar-for-dollar until the 80% limitation is reached.

Which one of the following statements regarding Workers' Compensation and Social Security Disability Income (SSDI) is false? A If the total of SSDI, Workers' Compensation, and other public disability benefits exceeds 50% of the worker's pre-disability earnings, the SSDI benefit will be reduced $2 -for- $1 until the 50% limitation is reached B SSDI benefits are secondary to Workers' Compensation and any other public insurance benefits C The individual or group benefit will be reduced dollar-for-dollar by the amount of Workers' Compensation benefits paid, so that the total disability income benefit payable from all sources combined will not exceed the amount that would be payable by the individual or group disability policy on its own D Workers' Compensation benefits are primary to either individual or group disability income benefits

If the total of SSDI, Workers' Compensation, and other public disability benefits exceeds 50% of the worker's pre-disability earnings, the SSDI benefit will be reduced $2 -for- $1 until the 50% limitation is reached ------------------------- If the total of SSDI, Workers' Compensation, and other public disability benefits exceeds 80% of the worker's pre-disability earnings, the SSDI benefit will be reduced dollar-for-dollar until the 80% limitation is reached.

Attaching a(n) ___________ rider excludes coverage for a condition that would otherwise be covered. A Rehabilitation benefit B Waiver C Impairment D Lifetime benefit

Impairment ---------- Attaching an impairment rider excludes coverage for a condition that would otherwise be covered.

Which rider would eliminate coverage for a preexisting condition? A Guaranteed Purchase Option B Impairment Rider C Lifetime Benefit Rider D Return of Premium Rider

Impairment Rider --- The Impairment Rider eliminates coverage for pre-existing conditions, but at the same time may make insurance available for an otherwise uninsurable person.

Which rider would eliminate coverage for a preexisting condition? A Impairment Rider B Guaranteed Purchase Option C Return of Premium Rider D Lifetime Benefit Rider

Impairment Rider ------ The Impairment Rider eliminates coverage for pre-existing conditions, but at the same time may make insurance available for an otherwise uninsurable person.

Which rider would eliminate coverage for a preexisting condition? A Guaranteed Purchase Option B Impairment Rider C Lifetime Benefit Rider D Return of Premium Rider

Impairment Rider --------- The Impairment Rider eliminates coverage for pre-existing conditions, but at the same time may make insurance available for an otherwise uninsurable person.

Which rider would eliminate coverage for a preexisting condition? A Impairment Rider B Lifetime Benefit Rider C Return of Premium Rider D Guaranteed Purchase Option

Impairment Rider --------- The Impairment Rider eliminates coverage for pre-existing conditions, but at the same time may make insurance available for an otherwise uninsurable person.

Under a Key Employee Disability Income Policy, the employer is all of the following, except: A Policyowner B Premium payor C Recipient of the proceeds D Insured

Insured ---

Under a Key Employee Disability Income Policy, the employer is all of the following, except: A Premium payor B Insured C Recipient of the proceeds D Policyowner

Insured ------- As in Key Employee or Key Person life insurance (Chapter 1), the employer is the owner, premium payor, and recipient of the proceeds. The key employee or person is the insured.

If the insured changes occupations after the policy is issued, which of the following statements is correct? A It could result in a change of benefits depending on the new occupation, or the insurer could change the amount of premium to fit the occupational rating for the current level of benefit B If the policy is within its first two years the insurer can void the policy C No changes are made in the policy since the policy was issued and is in-force D If the insured changed to a more hazardous occupation the benefit would increase and/or the premium would be lowered

It could result in a change of benefits depending on the new occupation, or the insurer could change the amount of premium to fit the occupational rating for the current level of benefit ----------- If the insured changes occupations after the policy is issued this could result in a change of benefits depending on the new occupation, or the insurer could change the amount of premium to fit the occupational rating for the current level of benefit.

The optional guaranteed purchase option rider allows the insured to purchase additional coverage in all of the following situations, except: A Birth of a child B Marriage C Job change D Reaching a specified age or date

Job change ---------- The Guaranteed Purchase Option (Guaranteed Insurability, Future Increase) Rider guarantees that on specified dates, ages, or occurrences, such as marriage, birth of a child, etc., the insured may purchase additional monthly benefits, if income justifies it, without proof of insurability. Rates are based on attained age.

The two categories of Group Disability Income policies are: A Medicare and Social Security B Partial and Residual C Long-Term and Short-Term D Sickness or Accidental

Long-Term and Short-Term --------- Disability Income policies are characterized as being Long-Term or Short-Term.

Presumptive Disability

Loss is presumed to be total and permanent due to the loss of sight, speech,hearing, or 2 limbs and provides a lump sum payment

Martha's Disability Income policy contains a definition of 'Presumptive Disability'. Each of the following situations would meet this definition, except: A Loss of sight B Loss of a finger C Loss of hearing D Loss of speech

Loss of a finger ------------ Presumptive Disability involves the loss of two or more limbs, not the loss of a finger.

24-Hour Care Coverage in California is designed to: A Lower to the cost of health insurance provided to employees B Lower the cost of Workers' Compensation and health insurance coverage for employers C Raise revenue for the California Department of Insurance D Increase the revenues of domestic insurers

Lower the cost of Workers' Compensation and health insurance coverage for employers ------------ The concept of 24-Hour Care Coverage is to lower the cost of Workers' Compensation and health insurance coverage for employers in California.

Joan was told she could only expect about 70% of her weekly salary on a disability check if she was ever disabled. The reason for this is to reduce _________. A Malingering B Misalignment C Malfunctions D Manipulation

Malingering

Joan was told she could only expect about 70% of her weekly salary on a disability check if she was ever disabled. The reason for this is to reduce _________. A Misalignment B Malfunctions C Manipulation D Malingering

Malingering ------------ Malingering can be characterized as either a moral hazard (lying about one's disability) or a morale hazard (a person chooses not to work because they have some income available).

Which of the following is a limited form of medical expense coverage added to a disability income policy? A Social insurance supplement rider B Additional monthly benefit rider C Hospital confinement rider D Non-disabling injury rider

Non-disabling injury rider ----------- A Non-Disabling Injury Rider does not pay disability income, but pays medical expenses related to an injury that does not result in total disability (emergency room, x-rays, durable medical equipment, etc.). It is a limited form of medical expense coverage added to a disability income policy.

In Disability Income underwriting, the single most important rating factor from an underwriting standpoint is the applicant's: A Finances B Gender C Occupation D Health

Occupation --- Although many factors are considered in the underwriting process, the applicant's occupation is the single most important.

In Individual Disability Income underwriting, the single most important rating factor from an underwriting standpoint is the applicant's: A Gender B Finances C Health D Occupation

Occupation -------- Although many factors are considered in the underwriting process, the applicant's occupation is the single most important, because it defines the primary risk.

In Disability Income underwriting, the single most important rating factor from an underwriting standpoint is the applicant's: A Occupation B Health C Finances D Gender

Occupation ---------- Although many factors are considered in the underwriting process, the applicant's occupation is the single most important.

Ole Olson owns a Business Overhead Expense Policy whereby if he should become disabled, the policy will continue to cover most business expenses in his absence. The policy would cover all of the following, except: A Ole's office rent B Ole's personal lost income C Ole's utility bills D Ole's employee payroll

Ole's personal lost income -------- The intent of the policy is to offset expenses, not to replace the disabled owner's personal lost income. If Ole is concerned about his own personal lost income, he should own an individual Disability Income policy.

Ole Olson owns a Business Overhead Expense Policy whereby if he should become disabled, the policy will continue to cover most business expenses in his absence. The policy would cover all of the following, except: A Ole's employee payroll B Ole's office rent C Ole's utility bills D Ole's personal lost income

Ole's personal lost income ---------------- The intent of the policy is to offset expenses, not to replace the disabled owner's personal lost income. If Ole is concerned about his own personal lost income, he should own an individual Disability Income policy.

When it comes to receiving disability income benefits, an individual may be entitled to income from more than one source, so benefits are coordinated between individual and group insurance and other sources of insurance to prevent: A Duplication of benefits B Integration of benefits C Profiteering D Overinsurance

Overinsurance ---------- When it comes to receiving disability income benefits, an individual may be entitled to income from more than one source so to prevent overinsurance, benefits are coordinated between individual and group insurance and other sources of insurance.

A Business Overhead Expense policy, as a form of disability insurance, provides payments for all of the following, EXCEPT _____________. A Employee wages B Raw materials used to manufacture goods sold C Taxes, utilities, rent D Owner's income

Owner's income ---- A Business Overhead Expense policy will not pay the wages of the business owner. By paying the other expenses of the business, the business can remain financially stable until the owner is able to return to work.

A disability that impairs the insured's ability to work and from which full recovery is not possible is considered to be: A Partial B Total C Temporary D Permanent

Permanent ----------- A permanent disability is one that impairs the insured's ability to work and from which full recovery is not possible.

An insured owns a disability income policy that has a waiver of premium rider in the event he/she suffers a total disability. 5 years after the issuance of the policy, the insured suffers a disability and is unable to work for 18 months before returning to work. The rider has a 3 month waiting period. Which of the following best describes the benefits of the waiver of premium rider? A All premiums will be waived during the period of disability except for the first 3 months B The first 3 months premium waived C Since the disability was not permanent, no benefits are received from the rider D Premiums will be waived retroactively to the beginning of the disability

Premiums will be waived retroactively to the beginning of the disability ----- The insured would have had to have paid the first three months premium until he/she was on claim, then the company would have refunded those premiums and waived the rest of the premiums while he was still on claim.

The social insurance supplement (SIS) rider reduces overinsurance by matching Social Security as closely as possible and was developed by: A Federal government B Private insurers C State government D Non-profit organizations

Private insurers --- The social insurance supplement (SIS) rider was developed by private insurers to reduce overinsurance by matching Social Security as closely as possible and is normally written for a specified period of time.

The social insurance supplement (SIS) rider reduces overinsurance by matching Social Security as closely as possible and was developed by: A Non-profit organizations B Private insurers C Federal government D State government

Private insurers ------- The social insurance supplement (SIS) rider was developed by private insurers to reduce overinsurance by matching Social Security as closely as possible and is normally written for a specified period of time.

Key Employee Policy

Provides a benefit to the employer to help pay for a replacement, train a new employee, or replace loss of revenue if a valuable employee becomes disabled Disability Buyout

Disability Buyout

Provides a lump sum benefit to nondisabled business partners to fund the buyout of a disabled partner's share of the business

Residual disability

Provides benefits for loss of income after an insured returns to work following a total disability if he/she has reduced earnings as a result of the disability

Business Overhead Expense

Provides the funds to cover the expenses of a business when the owner becomes disabled

Which statement is false regarding Social Security Disability benefits? A To collect disability benefits, an employee must be unable to engage in any kind of gainful work because of a medically determined physical or mental condition that has lasted, or is expected to last, at least 12 months or to result in death B Qualification for benefits is contingent only upon the employee's having 45 work credits and being unable to perform his or her usual job C The waiting period is 5 months D The benefit for a qualifying disabled worker is a percentage of the PIA

Qualification for benefits is contingent only upon the employee's having 45 work credits and being unable to perform his or her usual job ---- To be 'fully' insured for Social Security Disability benefits, an individual must have 40 quarters of credit and the disability must last 12 months, or be expected to result in death. In addition to satisfying the 5-month waiting period, the person must be unable to perform 'any substantial gainful activity.'

Penelope received benefits from her disability policy and went back to work. After 30 days she found she was not able to work and began to immediately receive her disability payments. Which of following provisions made this possible? A Recurrent Disability Provision B Second Injury Provision C Presumptive Disability Provision D Residual Disability Provision

Recurrent Disability Provision

Penelope received benefits from her disability policy and went back to work. After 30 days she found she was not able to work and began to immediately receive her disability payments. Which of following provisions made this possible? A Second Injury Provision B Presumptive Disability Provision C Residual Disability Provision D Recurrent Disability Provision

Recurrent Disability Provision

Penelope received benefits from her disability policy and went back to work. After 30 days she found she was not able to work and began to immediately receive her disability payments. Which of following provisions made this possible? A Residual Disability Provision B Presumptive Disability Provision C Recurrent Disability Provision D Second Injury Provision

Recurrent Disability Provision ----------- The question defines the Recurrent Disability Provision.

A disability that is presumed to result from the same or a related cause of prior disability is a _____________. A Recurrent disability B Presumptive disability C Residual disability D Delayed disability

Recurrent disability --- A disability that was believed to have been resolved, but which returns within a stated period of time (such as 6 months) is known as a recurrent disability.

An insured took out a disability income policy while working in a low hazardous occupation. When filing a claim for disability income benefits, after a job related accidental injury, the insurance company discovered the insured changed jobs 2 years prior to the loss. The new job would have been classified as more hazardous. The insurance company will most likely: A Pay the benefit as contracted for since the policy is over 2 years old B Reduce the benefit to an amount the actual premium paid would have purchased under the proper job classification C Reduce the benefit payment dollar for dollar to account for the premium underpayment D Pay no benefit since the insured failed to inform the insurance company on a timely basis of the change in occupation

Reduce the benefit to an amount the actual premium paid would have purchased under the proper job classification -------------------- The insurer will pay only the amount of benefit that the insured would have been able to purchase, with the premium already paid, for the more hazardous job, so his benefit will be reduced accordingly.

If a disability insurance applicant is insurable, but not at a standard rate, all of the following are actions an underwriter can take, except: A Increase the elimination period B Reduce the benefit period and/or amount C Charge a higher premium D Reduce the dividends the policy is eligible for

Reduce the dividends the policy is eligible for ------------- If an applicant is substandard, the insurer may want to reduce the risk. This may be accomplished by charging an extra premium, increasing the elimination period, shortening the benefit period, reducing the amount of benefit and/or utilizing an exclusion rider when a condition appears certain to result in recurrent disabilities.

If a disability insurance applicant is insurable, but not at a standard rate, all of the following are actions an underwriter can take, except: A Increase the elimination period B Reduce the benefit period and/or amount C Charge a higher premium D Reduce the dividends the policy is eligible for

Reduce the dividends the policy is eligible for ----------------- If an applicant is substandard, the insurer may want to reduce the risk. This may be accomplished by charging an extra premium, increasing the elimination period, shortening the benefit period, reducing the amount of benefit and/or utilizing an exclusion rider when a condition appears certain to result in recurrent disabilities.

Which of the following are ways that the insurer can issue disability income coverage for a substandard risk? A Reduced benefit, higher premiums, rider excluding coverage B Rated up in age, graded benefit, temporary lien C Higher premium, higher benefit, shorter elimination period D COLA waiver, future purchase waiver, waiver of premium

Reduced benefit, higher premiums, rider excluding coverage --- Reduced benefits, higher premiums, and elimination of coverage for known risks (preexisting health conditions, vocational/avocational risks) are three of the ways in which insurers deal with substandard risk.

Sam is totally disabled and receiving benefits while attending an insurer-approved vocational training program. What provision guarantees the continuation of benefits while Sam participates in the training program and remains totally disabled? A Presumptive Disability B Temporary Disability C Impairment Disability D Rehabilitation

Rehabilitation ----------- Under the Rehabilitation Provision, total disability benefits will be continued as long as the insured is actively participating in the training program and remains totally disabled.

Sam is totally disabled and receiving benefits while attending an insurer-approved vocational training program. What provision guarantees the continuation of benefits while Sam participates in the training program and remains totally disabled? A Rehabilitation B Temporary Disability C Presumptive Disability D Impairment Disability

Rehabilitation ----------- Under the Rehabilitation Provision, total disability benefits will be continued as long as the insured is actively participating in the training program and remains totally disabled.

To reduce its exposure to claims from a substandard disability risk, an insurer may take all of the following actions, except: A Increase the elimination period B Charge additional premium C Remove all of the exclusion riders D Reduce the amount of benefit

Remove all of the exclusion riders

To reduce its exposure to claims from a substandard disability risk, an insurer may take all of the following actions, except: A Charge additional premium B Remove all of the exclusion riders C Increase the elimination period D Reduce the amount of benefit

Remove all of the exclusion riders --------- The underwriter might utilize a Full Exclusion Rider when a certain condition is more likely to result in claims.

A court reporter develops arthritis making it impossible to continue this employment. The reporter now has other employment at a reduced salary and receives a monthly benefit from an insurance contract due to which of the following policy provisions? A Partial Disability B Residual Disability C Recurrent Disability D Total Disability

Residual Disability

Which provision provides a loss of earnings benefit to an employee who returns to work after sustaining a total disability, if the insured's earnings are less than they were before the disability. A Restorative Disability B Presumptive Disability C Residual Disability D Recurrent Disability

Residual Disability

The elimination period in a disability income insurance policy: A Addresses where accidents and sicknesses must not occur in order for a claim to be payable B Defines what causes of loss are eliminated from potential claim payment C Serves as a time deductible before benefits are payable D Describes how long the policy must be in force before claims can be considered

Serves as a time deductible before benefits are payable ------------ Good Job! The elimination period is the period for which an insured person must be disabled before benefits begin. Benefits begin only after this period of time is satisfied.

Which measure could an underwriter use to reduce the risk when underwriting a Disability Income Policy? A Increase the benefit period and increase the amount of the benefit B Shorten the benefit period and increase the elimination period C Increase the benefit period and shorten the elimination period D Shorten the elimination period and increase the amount of the benefit

Shorten the benefit period and increase the elimination period ------------ By making the benefit period shorter and the elimination period longer, total claims exposure is reduced. Each of the other choices includes actions that would expose the insurer to more claims payments.

Which measure could an underwriter use to reduce the risk when underwriting a Disability Income Policy? A Increase the benefit period and shorten the elimination period B Shorten the benefit period and increase the elimination period C Shorten the elimination period and increase the amount of the benefit D Increase the benefit period and increase the amount of the benefit

Shorten the benefit period and increase the elimination period---------- By making the benefit period shorter and the elimination period longer, total claims exposure is reduced. Each of the other choices includes actions that would expose the insurer to more claims payments.

The type of disability that impairs an insured's ability to work but a full recovery is expected is considered: A Temporary B Partial C Permanent D Total

Temporary --- With a temporary disability an insured's ability to work is impaired, but a full recovery is expected.

The type of disability that impairs an insured's ability to work but a full recovery is expected is considered: A Total B Permanent C Temporary D Partial

Temporary -------------- With a temporary disability an insured's ability to work is impaired, but a full recovery is expected.

Most employers in California must participate in the State Disability Insurance (SDI) Program unless a voluntary plan has been approved by the: A The California Department of Managed Health Care B The National Association of Insurance Commissioners (NAIC) C The California Employment Development Division D The California Department of Insurance (CDI)

The California Employment Development Division -------- Most employers in California must participate in the State Disability Insurance (SDI) Program unless a voluntary plan has been approved by the California Employment Development Division.

Most employers in California must participate in the State Disability Insurance (SDI) Program unless a voluntary plan has been approved by the: A The California Employment Development Division B The National Association of Insurance Commissioners (NAIC) C The California Department of Managed Health Care D The California Department of Insurance (CDI)

The California Employment Development Division ----------- Most employers in California must participate in the State Disability Insurance (SDI) Program unless a voluntary plan has been approved by the California Employment Development Division.

Which one of the following regarding the State Disability Insurance (SDI) program is true? A The State Disability Insurance (SDI) program benefits received for a period of disability and benefits received for time off under the Paid Family Leave program are federally taxable as income B The State Disability Insurance (SDI) program benefits received for a period of disability are taxable as income, but benefits received for time off under the Paid Family Leave program are not federally taxable as income C The State Disability Insurance (SDI) program benefits received for a period of disability and benefits received for time off under the Paid Family Leave program are not federally taxable as income D The State Disability Insurance (SDI) program benefits received for a period of disability are not taxable as income, but benefits received for time off under the Paid Family Leave program are federally taxable as income

The State Disability Insurance (SDI) program benefits received for a period of disability are not taxable as income, but benefits received for time off under the Paid Family Leave program are federally taxable as income ------------ The State Disability Insurance (SDI) program benefits received for a period of disability are not taxable as income, but benefits received for time off under the Paid Family Leave program are federally taxable as income.

Which one of the following regarding the State Disability Insurance (SDI) program is true? A The State Disability Insurance (SDI) program benefits received for a period of disability and benefits received for time off under the Paid Family Leave program are federally taxable as income B The State Disability Insurance (SDI) program benefits received for a period of disability are not taxable as income, but benefits received for time off under the Paid Family Leave program are federally taxable as income C The State Disability Insurance (SDI) program benefits received for a period of disability are taxable as income, but benefits received for time off under the Paid Family Leave program are not federally taxable as income D The State Disability Insurance (SDI) program benefits received for a period of disability and benefits received for time off under the Paid Family Leave program are not federally taxable as income

The State Disability Insurance (SDI) program benefits received for a period of disability are not taxable as income, but benefits received for time off under the Paid Family Leave program are federally taxable as income ----------------- The State Disability Insurance (SDI) program benefits received for a period of disability are not taxable as income, but benefits received for time off under the Paid Family Leave program are federally taxable as income.

All of the following statements about the future increase option rider are true, EXCEPT: A Additional coverage obtained will be based on the insured's attained age premium rates B It enables an insured to purchase additional disability insurance protection regardless of insurability at specified future dates C The additional coverage is available at each option date regardless of the insured's current earned income D To guard against overinsurance the insurer will limit that amount of additional coverage that can be applied for on each option date

The additional coverage is available at each option date regardless of the insured's current earned income ---- The insured's current earned income must warrant the additional coverage applied for on the option date otherwise it will not be issued. This is to guard against overinsurance.

Which statement is false concerning Social Security disability benefits? A To be fully insured for disability benefits, the employee must be either fully or currently insured under the Social Security system B The employee must only be unable to engage in his/her own occupation to be considered disabled C Benefits may only start after 5 full calendar months of disability, and are not retroactive to the date of disablement D The amount of the benefit is based on the employee's Primary Insurance Amount

The employee must only be unable to engage in his/her own occupation to be considered disabled ------------- The employee must be unable to engage in any kind of gainful employment, not just his/her own occupation.

Partial disability

The insured is unable to perform 1 or more regular duties of his/her occupation but is not totally disabled

Benefit period

The length of time the insured is eligible to receive payments after the elimination period has been satisfied

Which of the following would be considered a presumptive disability? A The loss of sight in an eye B The loss of a leg below the knee C The partial loss of hearing in an ear D The loss of the ability to speak

The loss of the ability to speak --------- The only response that reflects complete loss of a function is the ability to speak. 'The loss of a leg below the knee does not represent loss of two limbs, and loss of sight in an eye or hearing in an ear does not reflect loss of all sight or hearing.

Residual Disability Income pays funds to the insured, to make up for what the insured would have earned after returning to work, and while recovering from ___________. A Partial disability B Short-term disability C Total disability D Long-term disability

Total disability ----- Residual Disability provides benefits for loss of income after the insured returns to work usually following a total disability.

Residual Disability Income pays funds to the insured, to make up for what the insured would have earned after returning to work, and while recovering from ___________. A Partial disability B Short-term disability C Long-term disability D Total disability

Total disability --------- Residual Disability provides benefits for loss of income after the insured returns to work usually following a total disability.

Josh is a concert pianist and earns a very good living with his talent. He was in a car accident and broke his arm. His disability is considered: A Total, partial B Temporary only C Partial, temporary D Total, temporary

Total, temporary ---------- Temporary Disability occurs when the insured suffers a disability and is expected to recover fully. Temporary disability may be total or partial, depending on the person's ability to work or not. A professional pianist with a broken arm would not be able to perform, and would be considered totally disabled for a temporary period of time.

In addition to language similar to the any occupation definition of total disability, Social Security's definition of disability also includes which of the following statements? A Unable to qualify for benefits under any personal or state-sponsored disability insurance plan B Unable to perform any substantial gainful activity C Unable to perform more than 50% of one's customary duties D Unable to sit, stand, or lie down for extended periods of time

Unable to perform any substantial gainful activity

In addition to language similar to the any occupation definition of total disability, Social Security's definition of disability also includes which of the following statements? A Unable to perform any substantial gainful activity B Unable to qualify for benefits under any personal or state-sponsored disability insurance plan C Unable to sit, stand, or lie down for extended periods of time D Unable to perform more than 50% of one's customary duties

Unable to perform any substantial gainful activity --------- Social Security's definition of disability includes the statement about unable to perform any substantial gainful activity, which makes qualifying for SSDI benefits difficult in many cases.

In addition to language similar to the any occupation definition of total disability, Social Security's definition of disability also includes which of the following statements? A Unable to perform any substantial gainful activity B Unable to sit, stand, or lie down for extended periods of time C Unable to perform more than 50% of one's customary duties D Unable to qualify for benefits under any personal or state-sponsored disability insurance plan

Unable to perform any substantial gainful activity ---------- Social Security's definition of disability includes the statement about unable to perform any substantial gainful activity, which makes qualifying for SSDI benefits difficult in many cases.

In addition to language similar to the any occupation definition of total disability, Social Security's definition of disability also includes which of the following statements? A Unable to sit, stand, or lie down for extended periods of time B Unable to perform more than 50% of one's customary duties C Unable to qualify for benefits under any personal or state-sponsored disability insurance plan D Unable to perform any substantial gainful activity

Unable to perform any substantial gainful activity ---------- Social Security's definition of disability includes the statement about unable to perform any substantial gainful activity, which makes qualifying for SSDI benefits difficult in many cases.

In the event total disability continues beyond a specified period of time, future premiums will not be required to be sent in to the insurer for the duration of the disability. This optional rider is called the _________ rider. A Lifetime benefit B Waiver of premium C Return of premium D Impairment

Waiver of premium

In the event total disability continues beyond a specified period of time, future premiums will not be required to be sent in to the insurer for the duration of the disability. This optional rider is called the _________ rider. A Impairment B Return of premium C Lifetime benefit D Waiver of premium

Waiver of premium ------- In the event total disability continues beyond a specified period, future premiums will be waived by the insurer for the duration of the disability with a waiver of premium rider.

Group Disability Income is usually offered only on a nonoccupational basis, which will not cover work-related disabilities, because: A Work related injuries are normally covered under Workers' Compensation B The insurer may reduce its financial obligation this way C Damages for work-related injuries are determined in court D Most individuals have their own disability income policy

Work related injuries are normally covered under Workers' Compensation --------- Most group disability is written to be nonoccupational, because Workers' Compensation was developed and designed to cover work- and job-related accidents and disease.

Group Disability Income is usually offered only on a nonoccupational basis, which will not cover work-related disabilities, because: A Work related injuries are normally covered under Workers' Compensation B The insurer may reduce its financial obligation this way C Most individuals have their own disability income policy D Damages for work-related injuries are determined in court

Work related injuries are normally covered under Workers' Compensation --------- Most group disability is written to be nonoccupational, because Workers' Compensation was developed and designed to cover work- and job-related accidents and disease.

Group Disability Income is usually offered only on a nonoccupational basis, which will not cover work-related disabilities, because: A Damages for work-related injuries are determined in court B The insurer may reduce its financial obligation this way C Work related injuries are normally covered under Workers' Compensation D Most individuals have their own disability income policy

Work related injuries are normally covered under Workers' Compensation ------------ Most group disability is written to be nonoccupational, because Workers' Compensation was developed and designed to cover work- and job-related accidents and disease.

All of the following are possible business uses of Disability Income Insurance, except: A Business Overhead Expense B Workers' Compensation C Buy-Sell D Key Employee Insurance

Workers' Compensation ----------- Disability Income Insurance would not be used to provide benefits under Workers' Compensation.

The social insurance supplement (SIS) rider pays in addition to regular disability policies until: A Unemployment benefits begin B Workers' Compensation or Social Security disability payments begin C Retirement benefits begin D Supplemental Security Income begins

Workers' Compensation or Social Security disability payments begin ------------- The social insurance supplement (SIS) rider pays in addition to regular disability policies until Workers' Compensation or Social Security disability payments begin and is designed to provide benefits if Social Security is declined or stops because if either benefit stops, the SIS will pay benefits.