Diability income insurance

Typically, Long-Term Disability benefits are coordinated with which benefit plan?

Social Security

Jonas has disability insurance through his employer. The employer pays 75% of the premium, and Jonas pays the other 25%. What is Jonas's tax liability for any benefits paid from the disability plan?

Taxes must be paid on 75% of the benefits received

the waiver of premium does NOT include which provision?

all future premiums are waived if the insured recovers from the disability

change of occupation provision

allows the insurer to reduce the maximum benefit payable under the policy if the insured switches to a more hazardous occupation or to reduce the premium rate charged if the insured changes to a less hazardous occupation. If the insured changes to a less hazardous job, the insurer will return any excess unearned premium.

waiver of premium rider

allows the policyowner to waive premium payments during a disability and keeps the policy in force. It does not provide cash payments to the policyowner.

partial disability

an Illness or injury preventing insured from performing at least one or more, but not all, of the insured's occupational duties or the inability to work at that job on a full-time basis, either of which result in a decrease in income.

guarenteed insurability rider

an arrangement, usually provided by rider, whereby additional insurance may be purchased at various times without evidence of insurability. This rider guarantees the insureds insurability giving them the right to purchase additional amounts of disability income coverage at predetermined times in the future without proof of good health.

Loss of income insurance provides

an individual the means to replace wages

The factor used most often when underwriting a disability income policy is

annual income earnings

Which clause defines total disability as being unable to perform the major duties of the insured's regular occupation?

own occupation clause

A policyowner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision?

partial disability

With one exception (partial disability), an insured must be totally disabled before benefits under a disability income policy are

payable

in what form do diability income policies typically pay benefits?

periodic income

In what form do disability income policies typically pay benefits?

periodic time

Which type of disability would be less than total impairment and equal to permanent impairment?

permanent partial disability

Frank is shopping for a disability income policy. Which of the following would have the HIGHEST premium?

14 day waiting period/ 10 year benefit period

What percentage of a participant's income are group long-term disability benefit amount typically limited to?

60%

Which disability policy provision would address any concerns of the value of the benefits decreasing over time?

Cost of living benefit

Tom has a rider on his disability income policy that guarantees the right to increase his benefits without a medical exam. What kind of rider is this?

Guaranteed insurability rider

Coming from an insurance point of view, which of the following is the main risk associated with disability?

Loss of income

A policy owner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision?

Partial disability

Residual Amount Benefit

a disability income payment based on the proportion of income the insured has actually lost, taking into account the fact that the insured is able to earn some income. For example of the insured suffered a 20% loss of income because of the partial disability, the residual benefit payable would be 20% of the benefit that the policy would provide for total disability.

Presumptive Disability

a disability income policy benefit that provides that if an insured experiences a specified disability, such as blindness, the insured is presumed to be totally disabled and entitled to the full amount payable under policy, whether or not the insured is able to work. Presumptive disabilities include total blindness, total deafness, loss of speech, and loss of two or more limbs.

delayed disability provision

a disability income policy provision that allows a certain amount of time after an accident for a disability to result, and the insured remains eligible for benefits. Most policies allow a certain amount of time during which total disability may result from an accident and the insured will still be eligible for benefits.

Recurrent Disability Provision

a disability income policy provision that specifies the period of time during which the reoccurrence of a disability is considered a continuation of a prior disability.

elimination period

a duration of time between the beginning of an insured's disability and the commencement of the period for which benefits are payable.

cost of living adjustment rider

a rider available with some policies that provides for an automatic increase in benefits (typically tied to the Consumer Price Index), offsetting the effects of inflation.

The waiver of premium does NOT include which provision

all future premium are waived if the insured recovers from the disability

Nondisabling Injury

are injuries that may have resulted from an accident but are not necessarily disabling. Many disability policies include a provision for medical expense benefits that pay the actual cost of medical treatment for nondisabling injuries that result from an accident.

Accidental results

are policies that use the accidental bodily injury provision (sometimes called the results provision) required that the result of the injury has to be unexpected and accidental. This is far less restrictive than the accidental means provision.

A disability income policy can prevent an insured from earning a higher income than if he/she were working by utilizing

benefit limits

a disability income policy can prevent an insured from earning a higher income than he/she were working by utilizing

benefit limits

a disability policy owner is injured and becomes totally disabled. the benefits pay for two years, starting from the date of the injury. what is this time period called?

benefit period

Americans with Disabilities Act

considers major life activities to include, but are not limited to, caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working

An example of a presumptive disability would be

deafness

percent-of-earnings approach

determines the benefit using a percentage of the insured's pre-disability earnings and takes into account other sources of disability income.

The waiting period for a disability insurance policy

excludes payments for a short-term illness or injury

the waiting period for a disability insurance policy

excludes payments for short term illness or injury

rehabilitation benefit

facilitates vocational training to prepare insured for a new occupation.

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

probationary period

is a specified number of days after an insurance policy's issue date during which coverage is not afforded for sickness. Standard practice for group coverages as well as disability coverage.

Nonoccupational Coverage

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

permanent disability

is one that reduces or eliminates the insured's ability to work for the rest of the insured's life without expectation of recovery

Any occupation

is total disability that requires that for disability income benefits to be payable, the insured must be unable to perform any job for which the insured is "reasonably suited by reason of education, training, or experience."

Own occuptation

is total disability that requires that in order to receive disability income benefits the insured must be unable to work at the insured's own occupation.

Which of the following statements regarding Group Disability income insurance is TRUE

it provides benefits for nonoccupational illnesses and injuries

disability insurance is also called

living death

which of these would NOT be considered presumptive a disability? loss of vision and speech loss of hearing loss of leg or arm loss of leg and arm

loss of leg or arm

Elective Indemnity Options

may be selected by the insured when applying for a disability policy. These are typically for short-term disability income policies and provide for an optional lump sum payment for certain named injuries.

The monthly benefit for an individual disability income policy is usually limited to a percentage of the insured's income in order to avoid

over insurance

Chris is an insured bricklayer who severed his left hand in an automobile accident. Although his primary duty cannot be performed, Chris is also a substitute high school teacher. He collects a full disability income check every month. How does his policy define total disability?

own occupation

a rehabilitation benefit is intended to

prepare the insured to return to employment

Claims payable to a Disability Income insured, even when the insured can continue to work, are the result of a

presumptive disability

what is the purpose of a disbaility income benefit?

provide money for living expences

social security rider

provides for the payment of additional income when the insured is eligible for social insurance benefits but those benefits have not yet begun, have been denied, or have begun in an amount less than the benefit amount of the rider

Combination Definitions

requires the insured to be unable to perform any occupation for which he is reasonably suited by reason of education, training, or experience in order to qualify for disability income benefits.

flat amount approach

specifies a flat income benefit amount that will be paid if the insured becomes totally disabled. Normally, this amount is payable regardless of any other income benefits the insured may receive. This amount is usually 50% of the full disability benefit.

benefit period

the maximum length of time during which a benefit is paid. The longer the benefit period, the higher the cost (premium) of the policy. Instead of charging additional premiums or excluding coverage when issuing a disability income policy to a substandard risk, an insurer may shorten the benefit period.

Accidental means

the unforeseen, unexpected, unintended cause of an accident. The cause of the mishap must be accidental for any accident-based policy claim to be payable.

A disability elimination period is best described as a

time deductible

What is the elimination period of an individual disability policy?

time period a disabled person must wait before benefits are paid

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

wages