Chapter 3 Disability Income

K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income?

Disability Income

When determining the monthly benefit amount for a disability income policy, the factor that limits the amount a prospective insured may purchase is:

income

A disability elimination period is best described as a:

time deductible

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

wages

Which of the following Disability Income policy riders offer policyowners the ability to raise policy limits as their incomes increase and does not require proof of insurability?

A Guaranteed Insurability rider

Disability income insurance is designed to provide an individual with a specified income benefit in the event of a:

All of the above

which of the following options return all premium to the policyowner at age 65, minus any benefits received over the life of the contract?

Cash surrender Value

B is a teacher who was injured in a car accident and cannot work. She is now receiving monthly benefits as a result of this accident. Which type of policy does B have?

Disability Income

In a Disability Income policy, which of these clauses acts as a deductible?

Elimination Period

A woman is covered under disability income policy that contains a presumptive disability provision. If she were to lose 100% of her hearing, what would the insurance company be responsible for?

Full disability income benefits.

Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?

Guaranteed insurability rider

Under which of the following, an insurance agent may impose a limit on an individual policy coverage?

Impairment rider

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

How do partial disability benefits differ from total disability benefits?

Partial disability benefits begin when the insured returns to work

An insured cover under a Disability income policy is disabled and collecting benefits for a period of two months. He returns to work and is again disabled from the same cause, whereupon benefits continue to be paid. This is an example of which of the following?

Recurrent disability

When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following?

Residual disability.

What is the elimination period of an individual disability policy?

Time period a disabled person must wait before benefits are paid

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

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

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

which of the following statements accurately describes the financial impact of a total disability?

the financial impact would be worse than that of a death