Chapter 4* - EXAM- Disability Income Insurance (10 cau)

With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's A: MOnthly expenditures at the time of disability B: Gross income at the time of purchase C: Gross income at the time of disability D: Occupation at the time of purchase

B: Gross income at the time of purchase The insured's earned income at the time of purchase limits the amount of the monthly benefit that an insured may purchase in a Disability Income Policy

What is the primary factor that determines the benefits paid under a disability policy? A: Education level B: Wages C: Type of occupation D: Age

B: Wages The major factor in determining the benefit amount paid under a disability income policy is wages

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? A: Residual Benefit clause B: Waiver Benefit clause C: Concurrent Benefit clause D: Guaranteed Benefit clause

A: Residual Benefit clause A residual amount benefit is based on the proportion of income actually lost due to the partial disability, taking into account the fact the insured is able to work and earn some income

A disability elimination period is best described as a A: Time deductible B: Dollar deductible C: Eligibility period D: Probation period

A: Time deductible The best way to describe a disability elimination period is a "time deductible"

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

C: Normally includes an Elimination period Disability income policies typically contain an Elimination period

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

D: Earned, but unpaid benefits I this situation, any earned but unpaid benefits will be paid

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

D: Less than $5,000 per month benefit regardless of the cause In a $5,0000 per month. Disability Income policy, a covered partial disability will typically result in less than $5,000 per month regardless of the nature of the disability

An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT A: Medical history B: Gross income C: Occupation D: Spouse's occupation

D: Spouse's occupation In this situation, a spouse's occupation is not necessary for the application

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: A: Residual Disability provision B: Presumptive Disability provision C: Recurrent Disability provision D: Partial Disability provision

C: Recurrent Disability provision In this situation, the insurer will provide the same benefits without a new elimination period under the Recurrent Disability provision.

J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage in this? A: Limited coverage B: Worker's Compensation coverage C: Occupational coverage D: Nonoccupationally coverage

D: Nonoccupationally coverage The coverage provided by a Disability Income policy that does not provide benefits for losses occurring as the result of the insured's employment is called nonoccupationally coverage