Health Guiz - 04

A business wants to make sure that if a key employee becomes disabled, the business will be protected from any resulting loss Which kind of insurance will protect the business? A. Business Disability B. Individual Disability C. Management Loss D. Business Loss

A. Business Disability A business can purchase Business Disability Insurance in order to protect itself from losses resulting from the disability of key employees.

A small business owner is the insured under a disability policy that funds a buy-sell agreement. If the owner dies or becomes disabled the policy would provide which of the following? A. Cash to the owner's business partner to accomplish a buyout B. The rent money for the building C. The business manager's salary D. Disability insurance for the owner

A. Cash to the owner's business partner to accomplish a buyout. If an owner dies or becomes disabled, the disability policy under the buy-sell agreement would provide enough cash to accomplish a buyout of the company.

Which of the following is an eligibility requirement for all Social Security Disability Income benefits? A. Have attained fully insured status B. Be disabled for at least 1 year C. Have permanent kidney failure D. Be at least age 50

A. Have attained fully insured status Although Social Security offers many benefits, such as retirement, survivors and Medicare, only those who have attained fully insured status are eligible for Disability Income benefits. Contributing to Social Security for 40 quarters (10 years) attains fully insured status.

The coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insured's employment is called A. Nonoccupational coverage. B. Unemployment coverage. C. Occupational coverage. D. Workers compensation.

A. Nonoccupational coverage. Most group disability income is nonoccupational coverage, covering insureds only off the job. The employer carries workers compensation for on the job injuries or sickness.

Which of the following occupations would have the lowest disability insurance premiums? A. Personal Trainer B. Construction worker C. Stunt pilot D. Police officer

A. Personal Trainer The more hazardous an occupation is, the higher the insurance premiums will be. Therefore, because working as a personal trainer poses the least amount of risk, the premiums for this job would be the lowest.

Social Security was created to provide all of the following benefits EXCEPT A. Unemployment income. B. Survivor's benefits. C. Disability income. D. Retirement income.

A. Unemployment income. Social Security is designed to provide protection against financial loss due to old age, disability, or death. It also provides income during retirement.

A policy available to business owners that provides payment for normal business expenses in the event that the owner is disabled is called A. Recurrent Disability B. Business Overhead Expense. C. Credit Accident and Health coverage D. Partial Disability

B. Business Overhead Expense. Business Overhead insurance is often purchased by small employers to pay the ongoing business expenses (such as payroll) in the event the owner of the business becomes disabled. Premiums paid are tax deductible as a business expense. but proceeds paid are taxable as income.

Which of the following is considered a presumptive disability under a disability income policy? A. Loss of one hand or one foot B. Loss of two limbs C. Loss of one eye D. Loss of hearing in one ear

B. Loss of two limbs Presumptive disability is a provision that is found in most disability income policies that specifies conditions that will automatically qualify the insured for full disability benefits, such as the loss of two limbs.

Which statement accurately describes group disability income insurance? A. Short-term plans provide benefits for up to 1 year. B. The extent of benefits is determined by the insured's income. C. In long-term plans, monthly benefits are limited to 75% of the insured's income. D. There are no participation requirements for employees.

B. The extent of benefits is determined by the insured's income. Group plans usually specify the benefits based on a percentage of the worker's income. Group long-term plans provide monthly benefits usually limited to 60% of the individual's income.

What is the elimination period for Social Security disability benefits? A. 12 months B. 3 months C. 5 months D. 6 months

C. 5 months The elimination period for Social Security disability benefits is 5 months.

All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT A. Fully insured status. B. Waiting period of 5 months. C. Being age 65. D. Inability to perform any gainful work.

C. Being age 65. The term fully insured refers to someone who has earned 40 quarters of coverage (the equivalent of 10 years of work), and is therefore entitled to receive Social Security retirement, Medicare, and survivor benefits. The waiting, or elimination period for Social Security disability benefits is 5 months.

An insured owns a medical expense policy that he purchased for his family. The insured's employer purchased a Group Disability A. Income policy for the insured and all eligible employees. The insured subsequently suffered an accident on the job that left him unable to work for four months. If the insured receives benefits from his disability income policy, which of the following would be true? B. Benefits from emplover contributions are not taxable. The insured can deduct his medical expense benefits from his income tax. C. Benefits received that are attributable to employer contributions are fully taxable to the employee as income. D. Premiums the insured paid for his medical expense policy are normally deductible from his income.

C. Benefits received that are attributable to employer contributions are fully taxable to the employee as income. Group disability income premium payments are considered tax-deductible by the business as an ordinary business expense. In a plan funded entirely by the employer, income benefits are included in the employee's gross income and taxed as ordinary income.

When a group disability insurance policy is paid entirely by the employer, benefits paid to disabled employees are A. Deductible business expense to the employer. B. Taxable income to the employer. C. Taxable income to the employee. D. Deductible income to the employee.

C. Taxable income to the employee. Disability benefit payments that are attributed to employee contributions are not taxable, but benefits payments that are attributed to employer contributions are taxable.

Bethany studies in England for a semester. While she is there, she is involved in a train accident that leaves her disabled. If Bethany owns a general disability policy, what will be the extent of benefits that she receives? A. Full B. 50% C. 25% D. None

D. None General disability policies do not cover losses caused by war, military service, intentionally self-inflicted injuries, overseas residence, or injuries suffered while committing or attempting to commit a felony.

In which of the following cases would an "any occupation" disability income policy pay the benefits? A. The insured is unable to perform the duties of his or her specific occupation. B. The insured changes jobs and is injured as a result of a more hazardous occupation. C. The insured's family has unexpected expenses due to the insured's disability. D. The insured is unable to perform any jobs in the field related to the insured's education and experience.

D. The insured is unable to perform any jobs in the field related to the insured's education and experience. A policy that has an "any occupation" provision will only provide benefits when the insured is unable to perform any of the duties of the occupation for which they are suited by reason of education, training, or experience.