Chapter 4 - Disability Income Insurance

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

$1,250

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?

4 months

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

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?

Guaranteed Insurability Option rider

T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?

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

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?

Recurrent Disability

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

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

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

War

Non-occupational disability coverage is designed for:

employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation