4 - Disability Income Insurance (Test only has 5 Questions)

An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT

spouse's occupation (Correct.) In this situation, a spouse's occupation is not necessary for the application.

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

What does a Guaranteed Insurability rider provide a Disability Income policyowner?

The ability to periodically increase the amount of coverage without evidence of insurability (Correct.) A Guaranteed Insurability rider allows the insured to periodically increase the amount of benefits payable under the policy.

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 recurrent disability (Correct.) A second period of disability from the same or related cause of a prior disability is called a recurrent disability.

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

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

A CEO's personal assistant suffered injuries at home and 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 "Disability Income". In this situation, a Disability Income policy would pay monthly benefits.

With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's

gross income at the time of purchase (Correct.) 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.

A disability elimination period is best described as a

time deductible (Correct.) The best way to describe a disability elimination period is a "time deductible"

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

Applicant's monthly income (Correct.) In determining how much Disability Income insurance a prospective insured should purchase, the most important factor to be considered is the insured's monthly income.

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 (Correct.) If a physician wants to ensure he can increase the benefit for his disability policy as his practice and income grow, he would want to include a 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 (Correct.) A guaranteed insurability rider guarantees the insured the option of purchasing additional amounts of disability income coverage at predetermined times without requiring the insured to provide evidence of insurability.

What is the elimination period of an individual disability policy?

Time period a disabled person must wait before benefits are paid

What is the primary factor that determines the benefits paid under a disability income policy?

Wages

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 (Correct.) The Waiver of Premium provision in a health insurance contract suspends the insurer's right to receive premiums during a covered period of disability.

Non-occupational disability coverage is designed for

employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation (Correct.) Non-occupational disability coverage is designed for employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation.

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

Disability Income (Correct.) Disability Income would reimburse an insured for loss of earnings if the insured became sick.

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 (Correct.) In this situation, a Disability Income policy will pay monthly benefits to a teacher who is unable to work as a result of a car accident.

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 (Correct.) In this situation, any earned but unpaid benefits will be paid.

In a Disability Income policy, which of these clauses acts as a deductible?

Elimination Period (Correct.) The Elimination Period serves as the deductible in a Disability Income policy.

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 (Correct.) In a $5,000 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.

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?

Nonoccupational coverage (Correct.) 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 nonoccupational coverage.

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 (Correct.) In this situation, the insurer will provide the same benefits without a new elimination period under the Recurrent Disability benefit.

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 (Correct.) A residual amount benefit is based on the proportion of income actually lost due to the partial disability, taking into account the fact that the insured is able to work and earn some income.

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

income (Correct.) When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is income.