Chapter 15 - Disability Income Insurance

19. When determining the monthly benefit amt. For a Disability income policy, the factor that limits the amt. Of a prospective insured may purchase is

Income

36. 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

4. Trent has a permanent, partial disability where he is paid 50% of his previous income. Trent is covered by a

residual disability benefit

1. An individual Disability home insurance applicant may be required to submit all of the following information, EXCEPT

spouse's occupation.

13. Who does a disability income policy normally cover

wage earners.

7. Total disability can be defined as "the insured inability to perform the occupation for which he/she is reasonably qualified by education, training, or experience. "For disability income insurance purposes, this definition is known as

own occupation definition

25. Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase

Applicant monthly income

16. A CEO's personal assistant suffered injuries at home as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant

Disability income

33. 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

Earned, but unpaid benefits

27. T has Disability Income policy that pays monthly benefit of $5,000. If T becomes partially disabled,what ca he likely expect

Less than $5,000 per month regardless of the cause

28. What does a Guaranteed Insurabilty rider provide a Disability Income policyowner

The ability to periodically increase the amount of coverage WITHOUT evidence of insurability

32. How frequently does a disability income policy typically pay benefits

monthly

15. V is insured under an individual Disability Income policy with a 30 day Elimnation period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefits are payable

4 months.

30. 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 ins. Co. most likely regard this second period of disability as

A recurrent disability

24. At certain ages, an insured can increase the stated benefit under their disability income policy, regardless of health. Which policy rider does this describe

Cost of living Adjustment (COLA) rider

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

Disability Income

21. 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

8. At certain ages or dates, an insured can increase the stated benefit (within limits) under their disability income policy, regardless of health. Which policy rider BEST describes this

Future income option

18. 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 l5. Z then becomes disabled from an accident on February 1 and the disability lsts until July 1, of the same year. Z will become eligible to receive payments starting on

March 1

9. Mary and Paul have individual disability income policies that both pay a $5,000/month bnefit. Mary's policy has a 30 day elimination period, and Paul's policy has a five month elimination period. Which of the following statements is true

Paul's premium is probably less than Mary's

6. What is a disability income policy designed to do

Pay benefit to maintain the insured's current standard of living

22. When an insured has the same disability within a specified time period and the ins. Co. provides the same benefits without a new waiting period, the second disability is covered under of the following benefits

Recurrent Disability

34. A Disability income policyowner suffers a disability which was due to the same cause as a previous disability. Both disabilities occurred within a 5 month period. The insurer may cover the second disability without a new elimination period under the

Recurrent Disability provision

31. 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

5. The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the

Waiver of Premium.

14. Which provision allows a disability income policy to remain in force without further payments when the insured has become totally and permanently disabled

Waiver of premium

35. Which provision allows a disability income policy to remain in force without further payments when the insured has become totally and permanently disabled

Waiver of premium.

17. Disability policies do NOT normally pay for disabilities arising from which of the following

War

37. Disability policies do NOT normally pay for disabilities arising from which of the following

War

10. Typically, a disability income rider will pay

a monthly income for as long as the insured remains totally and completely disabled

29. Individual disability income policies normally have a premium that

adjust annually

12. Individual disability income policies normally have a premium that

adjusts annually

3. The maximum amount of coverage placed on a disability income policy is based on the insured's

earned income from the previous year.

2. An insured owns a policy which includes a disability income rider. The disability benefit amount paid to the insured is based on the

face amount of the policy

23. An insured owns a policy which includes a disability income rider. The disability benefit amount paid to the insured is based on the

face amount of the policy

26. With disability Income ins., an ins. Co. may limit the monthly benefit mount a prospective policy holder may obtain because of the insured's

gross income at the time of purchase

11. How frequently does a disability income policy typically pay benefits

monthly