Underwriting, Pricing Claims - Section 16

Each of the following are levels of severity for temporary disability : Permanent Total. Temporary Total. Permanent Partial. Except:

Modified Total.

What type of individual disability insurance would offer a guaranteed future premium?

Non-cancelable policy.

A disability resulting from war or any military duty is covered by none of this choices : Workers' compensation. OASDHI. 24 hour coverage.

None of the above.

What provision in disability allows an insurer to pay no benefits for 30 days? Elimination period waiting period

Both Elimination and Waiting Period are correct

All of the following are disability rating factors : Hobbies . Age. Gender. Except.

Family health history.

Disability insurance is similar to life insurance because they both:

protect future income.

Disability income policies differ in premium, underwriting standards and the policy itself by all of these : The elimination period required. The definition of total disability. Whether or not coverage is provide in addition to workers compensation.

All of these.

What disability rider provides increases in coverage for specific periods of time?

Automatic Increase Rider.

The following are true about the Cost of Living Rider (COLA) COLAs tie adjustments to increases in the Consumer Price Index (CPI). Most COLA riders cap the maximum increase to a percentage such as 4% a year. One of the most important aspects of your disability policy is to protect against inflation. Except:

COLA rider is the best rider, because it doesn`t have a maximum cap and always increases.

the following statements are false: A client who is considered a good risk for life insurance is automatically considered a good risk for disability coverage. Disability underwriting is more liberal than life underwriting. Disability coverage cannot be denied to applicants who are given clean bills of health by their physicians. except ? true:

Disability underwriters are given a lot of leeway when dealing with preexisting conditions.

What is the definition of own occupation?

Inability to work at your regular occupation.

the following statements about the MIB are true? The MIB collects information on consumers for use in the insurance underwriting process. Data collected includes medical conditions, driving records, criminal activity, and more. The main goal is to prevent fraud and protect policy owners against selection of adverse risks. Except:

Insurance companies may use MIB reports to decline a policy.

What are four key risk factors underwriters consider before issuing a policy?

Occupation, health, income, and age.

What is a Capital Sum Benefit on disability policies?

Pays a lump sum benefit for certain specified loss.

The following statements about federal income tax are true? Income benefits are not taxable as income if the insured pays the premium. Premiums may be tax deductible for the employer if they pay the premiums. Income benefits are taxable if the employer paid part of the premium. except/ not true

Premiums are tax deductible if the insured pays the premium.

When a client completely loses his speech, hearing and sight and the use of both hands, both feet or one hand and one foot, it is known as:

Presumptive disability.

All of the following statements about partial disability are true: The definition of partial disability is the inability to perform one or more important duties of an insured's regular occupation. A partial disability must follow a period of total disability. Partial disability benefits encourage a person to return to work on a limited basis during a convalescent period.

The benefit amount for a partial disability is usually the same as that for total disability.

The Notice of Claim provision in a disability policy says all of the following? After the occurrence, the insured must file a notice within 20 days. The insured must submit proof of disability before the company sends payments. Insured must report the loss to the company within a reasonable period of time after the occurrence. Except:

The insured must submit proof of disability every year for disabilities that last over 6 months.

The following are guidelines that help avoid unfair underwriting for the risk of HIV/AIDS are: The information gathered must be handled confidentially. The insurance company must get written consent from an applicant in order to give an HIV test. The insurer cannot deny coverage if the insured already has coverage and dies of AIDS. Except:

The insurer cannot deny coverage based solely on results from two different medical samples.

Morbidity tables are used by insurance companies to calculate:

The likelihood of sickness.

Which of the following statements is false regarding disability income policies?

Three methods are used to determine the amount of benefits payable to the insured.

What is the purpose of the recurrent disability provision?

To do away with the elimination period in case of a relapse.

What is the purpose of the residual benefit provision?

To make up income that cannot be earned due to a permanent partial disability.

Under the residual disability provision, an insured receives:

a percentage of his or her disability benefit based on the percentage of income loss.

Partially disabled means that as a result of the injury or sickness you are:

able to perform all duties of your own occupation only on a part time basis.

Disability income benefits are a percentage of which of the following?

unable to work because of sickness or injury.