Disability Income Insurance

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? Extended Term rider Cost of Living Adjustment rider Guaranteed Insurability Option rider Waiver of Premium rider

guaranteed insurability option rider

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 Additional coverage rider Paid-up option rider Extended insurability rider

guaranteed insurability rider

When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is occupation income age medical condition

income

What is the primary factor that determines the benefits paid under a disability income policy? Education level Wages Type of occupation Age

wages

Disability policies do NOT normally pay for disabilities arising from which of the following? Accidents War Negligence Sickness

war

N is covered under an individual Disability policy with a 30-day Elimination period and a monthly benefit of $500. N is totally disabled for 3 1/2 months. N's total benefit received on this claim is $2,000 $1,750 $1,500 $1,250

$1,250

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? $500 $1,000 $1,250 $1,750

$1,250 (3.5months - 1month elim. period = 2.5 x 500 per month)

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? 6 months 5 months 4 1/2 months 4 months

4 months

P received Disability income benefits for 3 months then returns to work. She is able to work one month before her condition returns, leaving her disabled once again. What would the insurance company most likely regard this second period of disability as? A presumptive disability An occupational disability A residual disability A recurrent disability

a recurrent disability

Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase? Applicant's occupation Applicant's monthly income Applicant's health Applicant's previous disabilities

applicants monthly income

In a Disability Income policy, which of these clauses acts as a deductible? Elimination Period Waiver Period Deductible Period Probationary Period

elimination period

A Disability Income policyowner suffers a disability which was due to the same cause as a previous disability. Both disabilities occurred within a five-month period. The insurer may cover the second disability without a new elimination period under the Residual Disability provision Presumptive Disability provision Recurrent Disability provision Partial Disability provision

recurrent disability provision

An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT medical history gross income occupation spouse's occupation

spouse's occupation

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? Major Medical Blanket Disability Income Indemnity

disability income

T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect? $5,000 per month benefit $10,000 per month benefit if the cause was accidental More than $5,000 per month benefit if cause was work-related Less than $5,000 per month benefit regardless of the cause

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

A disability elimination period is best described as a time deductible dollar deductible eligibility period probation period

time deductible

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

disability income

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? $2,000 A lump sum of six times the monthly benefit Nothing Earned, but unpaid benefits

earned, but unpaid benefits

Non-occupational disability coverage is designed for -24 hour protection -those who are exempt from Workers' Compensation coverage -sole proprietors and self-employed individuals -employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation

employees who suffer from 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 -monthly expenditures at the time of disability -gross income at the time of purchase -gross income at the time of disability -occupation at the time of purchase

gross income at the time of purchase

Z owns a Disability Income policy with a 30-day Elimination period. Z contracts pneumonia that leaves him unable to work from January 1 until January 15. Z then becomes disabled from an accident on February 1 and the disability lasts until July 1 the same year. Z will become eligible to receive benefits starting on January 1 January 15 February 1 March 1

march 1

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? Limited coverage Workers' Compensation coverage Occupational coverage Nonoccupational coverage

nonoccupational coverage

Which of these statements concerning an individual Disability Income policy is TRUE? -Premiums are normally tax-deductible -Age of the insured determines the amount of the benefits -Normally includes an Elimination period -Benefits are normally taxable

normally includes an elimination period

When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits? Residual Disability Presumptive Disability Recurrent Disability Repeat Disability

recurrent disability

D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits? Residual Benefit clause Waiver Benefit clause Concurrent Benefit clause Guaranteed Benefit clause

residual benefit clause

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 Recurrent Disability Presumptive Disability Occupational Disability

residual 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? Waiver of premium Recurring disability Residual disability Presumptive disability

residual disability

What does a Guaranteed Insurability rider provide a Disability Income policyowner? -The guarantee that the premiums will never increase -The guarantee that the policy will never be cancelled -The ability to periodically increase the amount of coverage without evidence of insurability -The ability to periodically increase the amount of coverage only with evidence of insurability

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

T was insured under an individual Disability Income policy and was severely burned in a fire. As a result, T became totally disabled. The insurer began making monthly benefit payments, but later discovered that the fire was set by T in what was described as arson. What actions will the insurer take? -The insurer will rescind the policy, deny the claim, and recover all payments made -Due to the policy not being post-claim underwritten, the insurer must continue to pay this claim -Claim will be rejected because of this criminal act, but no recovery of payments will be made -Claim will be denied but the policy will remain in force without further premium payments due to the insured's total disability

the insurer will rescind the policy, deny the claim, and recover all payments made

What is the elimination period of an individual disability policy? Time period an insured must wait before coverage begins Time period a disabled person must wait before benefits are paid Time period after the policy issue date in which the provisions are still contestable The point in time when benefits are no longer payable

time period a disabled person must wait before benefits are paid

The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the Probation Period Grace Period Waiver of Premium Elimination Period

waiver of premium