Chapter 10 Exam
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 Income C - Probationary Period D - Loss of Time
A - 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.
The optional guaranteed purchase option rider allows the insured to purchase additional coverage in all of the following situations, except: A - Job change B - Birth of a child C - Reaching a specified age or date D - Marriage
A - Job change The optional guaranteed purchase option rider allows the insured to purchase additional coverage in all of the following situations, except:
Most group Disability Income contracts are offered on a(n): A - Nonoccupational basis B - Noncontributory basis C - Occupational basis D - Contributory basis
A - Nonoccupational basis Workers' Compensation is designed to cover occupational or job-related accidents and disease, so the group plan would be designed to cover nonoccupational 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 - Reduce the dividends the policy is eligible for B - Increase the elimination period C - Charge a higher premium D - Reduce the benefit period and/or amount
A - 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.
All of the following are possible business uses of Disability Income Insurance, except: A - Workers' Compensation B - Key Employee Insurance C - Business Overhead Expense D - Buy-Sell
A - Workers' Compensation Disability Income Insurance would not be used to provide benefits under Workers' Compensation.
_______________ is insurance provided by an employer to cover injuries that occur on the job only. A - Workers' Compensation B - Group health insurance C - Group accidental death and dismemberment D - Group disability income
A - Workers' Compensation Workers' Compensation is insurance provided by an employer to cover injuries that occur on the job only.
24-Hour Care Coverage is the joint issuance of a Workers' Compensation policy for nonoccupational injuries and illnesses with all of the following, except: A - A health care service plan contract B - A life insurance policy C - A disability insurance policy D - A medical type of insurance coverage policy
B - A life insurance policy 24-Hour Care Coverage is the joint issuance of a Workers' Compensation policy with a disability insurance policy, health care service plan contract, or other medical insurance coverage for nonoccupational injuries and illnesses, but does not include a life insurance policy.
Insurance companies writing disability income generally have an occupational classification system based on considerations of all of the following, except: A - Job duties B - Earning potential C - Stability of the industry D - Claims history of the occupation
B - Earning potential Insurance companies writing disability income generally have an occupational classification system based on considerations, such as job duties, claims history of the occupation, and stability of the industry. Earning potential is not one of the criteria in determining occupational classifications.
All of the following are true regarding 24-Hour Care Coverage in California, except: A - It is designed to lower the cost of Workers' Compensation and health insurance coverage for employers in California B - The 24-Hour Care Coverage product may include the sale of life insurance C - Life agents desiring to sell the coverage are required to obtain 4 hours of Continuing Education credits in Workers' Compensation Insurance D - It is designed to be a seamless system to provide both occupational and nonoccupational coverage
B - The 24-Hour Care Coverage product may include the sale of life insurance 24-Hour Care Coverage shall not include a life insurance policy.
24-Hour Care Coverage in California is designed to: A - Lower to the cost of health insurance provided to employees B - Raise revenue for the California Department of Insurance C - Lower the cost of Workers' Compensation and health insurance coverage for employers D - Increase the revenues of domestic insurers
C - 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.
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 - Long-term disability B - Short-term disability C - Total disability D - Partial disability
C - Total disability Residual Disability provides benefits for loss of income after the insured returns to work usually following a total disability.
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
D - 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.
24-Hour Care Coverage in California is transacted by: A - Only a licensed Property & Casualty agent B - Any licensed life insurance agent C - Any licensed agent D - Only a licensed Accident & Health agent
D - Only a licensed Accident & Health agent Only a licensed Accident & Health agent may be authorized to transact 24-Hour Care Coverage who must complete 4 hours of CE in Workers' Compensation.
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 elimination period and increase the amount of the benefit C- Increase the benefit period and shorten the elimination period D - Shorten the benefit period and increase the elimination period
D - 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 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 and 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 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 are not taxable as income, but benefits received for time off under the Paid Family Leave program are 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.