Disability Income Exam Review

Disability policies do NOT normally pay for disabilities arising from which of the following?

War

Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?

applicant's monthly income

A CEO's personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant?

disability income policy

Non-occupational disability coverage is designed for

employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation

With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's

gross income at the time of purchase

T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?

less than $5,000 per month benefit regardless of the cause

A disability elimination period is best described as a

time deductible

Disability policies normally pay for disabilities arising from which of the following

Accidents, Negligence, sickness

M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate?

Earned, but unpaid benefits

A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow?

Guaranteed Insurability Option rider

R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity?

Residual Disability - A residual disability benefit is usually a percentage of the total disability benefit for periods when the insured is unable to perform some of the duties of his/her occupation.

An insured owns an individual Disability Income policy with a 30-day Elimination Period for sickness and accidents and a monthly indemnity benefit of $500. If the insured is disabled for 3 1/2 months, what is the MAXIMUM amount he would receive for an approved claim?

The correct answer is "$1,250". 3.5 months - 1 month elimination period = 2.5 months. 2.5 months X $500 monthly indemnity = $1,250.

What is the elimination period of an individual disability policy?

The correct answer is "Time period a disabled person must wait before benefits are paid". The elimination period of an individual disability insurance policy refers to the amount of time a disabled person must wait before benefits are paid.

J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?

The coverage provided by a Disability Income policy that does not provide benefits for losses occurring as the result of the insured's employment is called nonoccupational coverage.

The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the

The waiver of premium

An individual Disability Income applicant may be required to submit all of the following information

medical history, gross income, occupation

An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT

spouse's occupational

V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefit are payable?

4 months

What is the primary factor that determines the benefits paid under a disability income policy?

Wages

What does a Guaranteed Insurability rider provide a Disability Income policyowner?

the ability to periodically increase the amount of coverage without evidence of insurability