Ch. 4

an insured owns a general disability policy and is injured during a war, rendering him disabled. What will be the extent of benefits that he will receive? a) 100% b) 50% c) 25% d) 0%

d) 0%

After the elimination period, a totally disabled insured qualified and started receiving benefits from his disability income policy that has a waiver of premium rider. What will most likely happen to the premiums paid into the policy during the elimination period? a) premiums will be waived b) premiums will be refunded c) premiums will be retained by the company, but no further premium will be required for the duration of the disability d) premiums will be prorated

b) premiums will be refunded

what is the maximum period that an insurer would pay benefits in accordance with an additional benefit rider? a) for the duration of the disability or the contract, depending on which ends first b) 1 month c) 1 year d) 2 years

c) 1 year

The amount of disability benefits that an insured receives often depends upon the insured's? a) number of children at the time of the application b) medical history at the time of the application c) income at the time of the application d) martial status at the time of the application

c) income at the time of the application

Which of the following refers to "own occupation" disability? a) Insured is unable to perform duties of any occupation b) Insured is unable to perform duties of his/her own business c) Insured is unable to perform duties any related business d) Insured is unable to perform duties of the occupation for which he/she was educated and trained.

d) Insured is unable to perform duties of the occupation for which he/she was educated and trained.

Which of the following would qualify someone for disability benefits? a) injury only b) intentionally self-inflicted injury c) losses arising from war d) both accident and sickness

d) both accident and sickness

What provision can reduce the disability benefit based upon the insured's current income? a) waiver of monthly premium b) pro rata provision c) rehabilitation benefit d) relation of earnings to insurance

d) relation of earnings to insurance

Which of the following is not true regarding partial disability? a) this is a form of insurance that covers part-time workers b) the insured can still report to work and receive benefits c) benefit payments are typically 50% of the total disability benefit d) an insured would qualify if he couldn't perform some of his normal job duties

a) this is a form of insurance that covers part-time workers

a single mother wants to make sure that if she is unable to work for health reasons, she and her child would be protected financially. Which of the following insurance plans would best suit her needs? a) total disability plan b) workers compensation c) comprehensive health insurance plan d) accidental death & dismemberment

a) total disability plan

social security was created to provide all of the following benefits except? a) unemployment income b) survivor's benefits c) disability income d) retirement income

a) unemployment income

all of the following benefits are available under social security except? a) welfare benefits b) old-age and retirement benefits c) disability benefits d) death benefits

a) welfare benefits

which of the following disability income policies would have the highest premium? a) 15-day waiting period / 5 year benefit period b) 15-day waiting period / 10 year benefit period c) 30-day waiting period / 10 year benefit period d) 30-day waiting period / 5 year benefit period

b) 15-day waiting period / 10 year benefit period

the relation of earnings to insurance provision allows the insurance company to limit the insurance to his/her average income over what period of time? a) 18 months b) 2 years c) 6 months d) 1 year

b) 2 years

An insured wants to buy a disability policy that pays a maximum monthly benefit of $1,200. To make sure that the disability benefit keeps up with inflation, the insured would need to ass? a) an additional monthly benefit rider b) a cost of living rider c) a guaranteed purchase option rider d) 5% more to the premium each year

b) a cost of living rider

An insured has a Social Insurance Supplement rider in her disability income plan. Following a disability, she begins receiving benefit payments from the insurer. She then begins receiving Social Security benefits that are smaller than the SIS benefit payments. At that point, her insurer ends the SIS benefit payments. Which of the following best describes the situation? a) although a mistake may have occurred, the insured has no recourse b) this is typical of an SIS rider c) The insured should contact the insurer to confirm her actual Social Security benefit amount. The SIS rider should pay the different between the rider amount and the actual benefit d) miscommunication. The proper authorities should be notified in order to end social security payments so that the SIS rider will continue to pay

c) The insured should contact the insurer to confirm her actual Social Security benefit amount. The SIS rider should pay the different between the rider amount and the actual benefit

All of the following requirements of eligibility for social security disability income benefits except? a) fully insured status b) waiting period of 5 months c) being age 65 d) inability to perform any gainful work

c) being age 65

the rider that may be added to a disability income policy that allows for an increase in the benefit amount under certain conditions is called? a) double indemnity b) residual benefits c) cost of living (COLA) d) waiver of premium

c) cost of living

a small business owner is the insured under a disability policy that funds a buy-sell agreement. If the owner dies or becomes disabled, the policy would provide which of the following? a) cash to the owner's business to accomplish a buyout b) the rent money for the building c) the business manager's salary d) disability insurance for the owner

a) cash to the owner's business to accomplish a buyout

what type of benefit helps to pay for accidental injuries that are not server enough to qualify as disabilities? a) medical reimbursement benefit b) partial disability c) basic accidental injury d) accidental death and dismemberment

a) medical reimbursement benefit

A 37-year-old owns a policy with a guaranteed insurability rider. The policyowner would like to increase the benefit amount offered by the policy . What documentation will be required? a) no documentation b) proof of insurability c) medical records d) attending physician's report

a) no documentation

which of the following occupations would have the lowest disability insurance premiums? a) personal trainer b) construction worker c) stunt pilot d) police officer

a) personal trainer

Under a disability income policy, the insurer does not pay a monthly benefit that is equal to the insured's previous income. The reason for paying a benefit amount that is less than the insured's income is to? a) prevent overutilization and malingering b) prevent the insured from obtaining excess insurance c) enable the insurer to provide affordable coverage d) enable the insurer to reduce variable costs

a) prevent overutilization and malingering

Which rider, when added to a disability income policy, provides for changes in the benefits payable based on changes in the consumer price index? a) social security rider b) guaranteed insurability rider c) cost of living adjustment rider d) waiver of premium rider

c) cost of living adjustment rider

After a year of receiving disability income benefits, the insured notices that her monthly benefit has increased slightly. what rider does the policy likely have that would cause this? a) social security rider b) additional monthly benefit rider c) cost of living adjustment rider (COLA) d) annual renewable term rider

c) cost of living adjustment rider (COLA)

An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits? a) full benefits for 2 years b) no benefits c) full benefits d) partial benefits

c) full benefits

in a disability income policy, all of the following are considered presumptive disabilities except? a) loss of two limbs b) loss of speech c) loss of one eye d) loss of hearing

c) loss of one eye

an insured has been injured in an accident. although he is still receiving benefits from his disability policy, he does not have to pay premiums. this means that the policy includes? a) benefit of payment clause b) waiver of all payment c) waiver of premium feature d) return of premium rider

c) waiver of premium feature

What is the elimination period for social security disability benefits? a) 6 months b) 12 months c) 3 months d) 5 months

d) 5 months

Which of the following applies to partial disability benefits? a) an insured is entitles to a principal sum benefit for the partial loss of a limb b) payment is based on termination of employment c) benefits a re reduced once an insured is no longer under a doctor's care d) payment is limited to a certain period of time

d) payment is limited to a certain period of time

When a group disability insurance policy is paid entirely by the employer, benefits paid to disabled employees are? a) deductible income to the employee b) deductible business expense to the employer c) taxable income to the employer d) taxable income to the employee

d) taxable income to the employee

what is the purpose of rehabilitation benefit in disability insurance? a) to compensate the insured for the lost income b) to refund the insured's premium paid during the disability c) to help the insured recover from a disability d) to cover the expenses of retraining the insured to return to work

d) to cover the expenses of retraining the insured to return to work