AD Banker Life and Health Chapter 10 Exam Questions
An evaluation of Simon's past earnings reveals his average earned monthly income to be about $4,000 monthly. The greatest amount of benefit that Simon will likely be able to purchase under a Disability Income Policy, in order to reduce malingering in the event of a claim, is: A) $2,500 monthly B) $2,000 monthly C) $1,000 monthly D) $4,000 monthly
$2,500 monthly (Benefits are usually determined as a percentage of the insured's current earnings, normally 60 to 70%. Simon would be unlikely to obtain 100% of his income as a disability benefit.)
Which of the following elimination periods found in a disability income policy will result in the highest premium? A) 1 month B) 12 months C) 24 months D) 6 months
1 month The shorter the elimination period, the higher the premium.
An insured purchases a disability income policy with a 90 day elimination period. If a disability lasts 100 days, the insured would be entitled to receive benefits for: A. 100 days B. 10 days C. 190 days D. 90 days
10 days (The elimination period acts like a time deductible. The insured would be eligible to receive 10 days of benefit payments. Of the 100 days he was disabled, the first 90 are eliminated, leaving the remaining 10 days eligible for claim payment.)
What are the typical benefit periods for a group long-term disability benefit? A) 13 weeks, 26 weeks, 52 weeks B) 1 month, 6 months C) 2 years, 5 years, to age 65, lifetime
2 years, 5 years, to age 65, lifetime
What is an example of a typical benefit period for a group short-term disability benefit? A) 1 year B) 24 months C) 52 weeks D) lifetime
52 weeks (Short-Term Disability Income plans are characterized by maximum benefits for periods of rather short duration, such as 13, 26, or 52 weeks.)
Which of the following is a typical benefit period for a group short-term disability benefit? A. To age 65 B. 2 years C. 5 years D. 52 weeks
52 weeks (Short-Term Disability Income plans are characterized by maximum benefits for periods of rather short duration, such as 13, 26, or 52 weeks.)
The additional monthly benefit (AMB) rider is offered by many insurance companies as a short-term additional benefit in the form of a rider which normally covers the first: A. 1 to 3 months B. 3 to 6 months C. 6 to 12 months D. 12 to 18 months
6 to 12 months
The Age Discrimination in Employment Act (ADEA) affects both the short- and long-term group disability benefits for people employed after age _______. A. 65 B. 55 C. 62 D. 60
65
Which of the following should be put in place by two business partners who want to be assured that the business will not be lost should either one of them become disabled? A. An Errors & Omissions Policy B. A Guaranteed Purchase Option C. A Business Overhead Expense Contract D. A Buy-Sell Agreement
A Buy-Sell Agreement (The partners should put in place a Buy-Sell Agreement funded by a Disability Policy that would provide the funds needed to buy out the interests of either partner should one of them become totally disabled.)
All of the following are scenarios in which an insured would automatically qualify for total disability benefits whether or not they could actually continue working EXCEPT: A. A truck driver is involved in an accident and loses both legs B. A drummer in a band loses hearing C. A small business owner contracts a throat disease that causes the inability to speak D. A dancer slips and falls and sprains an ankle
A dancer slips and falls and sprains an ankle (Presumptive disability includes loss of use of any two limbs, total and permanent blindness, and loss of speech or hearing)
24-Hour Care Coverage is the joint issuance of a Workers' Compensation policy for nonoccupational injuries and illnesses with all of the following, except: A. A health care service plan contract B. A medical type of insurance coverage policy C. A life insurance policy D. A disability insurance policy
A life insurance policy
Some insurers refer to this rider as a Social Security Rider as it pays benefits while the insured is awaiting Social Security Benefits. The rider is not related to Social Security and, therefore, an ________ Rider is used to define the benefit. A. Impairment B. Cost of Living C. State Disability D. AMB (Additional Monthly Benefit)
AMB
Under a Key Employee Disability Income Policy, the employer is the: A) Owner B) Premium payor C) Recipient of the proceeds D) All of the answers listed
All of the answers listed
The two primary definitions of disability are "any occupation" and "own occupation." Which of these statements best describes the difference between the two definitions? A. An own occupation policy is less restrictive because it is easier to qualify for benefits B. An any occupation policy is less restrictive because it is harder to qualify for benefits C. An own occupation policy is more restrictive because it is harder to qualify for benefits D. An any occupation policy is more restrictive because it is easier to qualify for benefits
An own occupation policy is less restrictive because it is easier to qualify for benefits (An "own occupation" policy is less restrictive because one must only be unable to perform the essential duties of their occupation at the time of disability. An "any occupation" would not pay benefits if the insured could perform the duties of any occupation for which he/she was suited by reason of education, training, or prior experience, and is considered more restrictive.)
From the insured's perspective, which type of disability coverage would be the most restrictive as to qualifying for benefit payments? A. Social security B. Own occupation C. Worker's compensation D. Any occupation
Any occupation (Under any occupation, an insured is disabled if he/she cannot perform the duties of any occupation for which he/she is suited by reason of education, training, or prior experience. This is more restrictive than if an insured is unable to perform the essential duties of his/her own occupation.)
All of the following statements regarding 'any occupation' total disability are true, except: A) Any occupation is less restrictive than own occupation and is easier to qualify for benefits B) In order to qualify for disability benefits, it may be required that the insured be under the care of a physician C) Typically reserved for the lesser skilled occupations and may result in a lower premium D) Requires the insured to be unable to perform the duties of any occupation for which the insured is reasonably suited by reason of education, training, and experience
Any occupation is less restrictive than own occupation and is easier to qualify for benefits
Social Security uses which definition to determine total disability? A) Own occupation B) Any occupation C) Any substantial gainful activity D) Loss of income
Any substantial gainful activity
Common exclusions and limitations that apply to disability income policies include all of the following, EXCEPT: A. Attempted suicide and intentional self-inflicted injuries including intoxication or misuse of prescription medication B. Pre-existing conditions as defined in the contract C. Athletic Hobbies D. Foreign Travel
Athletic Hobbies (Hazardous hobbies are excluded, but not all athletic hobbies are defined as hazardous)
Which of the following is needed to qualify for a Social Security Disability Benefit? A) Have less than $1,000 in assets B) Be either currently or fully insured C) Fulfill a 4-month waiting period, and have paid into Social Security D) Be age 60, widowed, and have one dependent
Be either currently or fully insured
The __________ _____________ is the length of time the insured is eligible to receive payments after the elimination period has been met. A) Benefit Period B) Elimination Period C) Waiting Period D) Payment Period
Benefit period
Which of the following terms best describes the maximum length of time that disability income benefits will be paid to the disabled insured? A. Benefit period B. Disability period C. Coverage period D. Elimination period
Benefit period
Which term best describes the maximum length of time that disability income benefits will be paid to the disabled insured? A) Benefit period B) Disability period C) Coverage period D) Elimination period
Benefit period
A disability income policy would honor a covered claim submitted by an insured in which one of the following situations? A. Hazardous hobbies or occupations B. Active duty in the military C. Broken limbs during a recreational league sporting event D. War or act of war
Broken limbs during a recreational league sporting event
What type of disability income insurance pays a lump sum enabling certain businesses to cover the cost of purchasing a disabled business owner's interest in the business? A. Business overhead expense B. Key employee C. Buy-sell D. Reducing term
Buy-sell
This form of a return of premium begins building values equal to a percentage of premiums paid for a disability policy. The values start building around the third year and build to no more than 100% at age 65, which can be returned to the insured at that time, less any claims. This describes which of the following riders? A. Cost of Living B. Cash Value (Surrender) Rider C. State Disability D. AMB (Additional Monthly Benefit)
Cash Value (Surrender) Rider
The State Disability Insurance (SDI) program provides short-term benefits to eligible workers who:
Contribute a small percentage of their gross wages each pay period up to the annual maximum
The ________ Automatically increases monthly benefits, after the onset of disability, often in relation to increases in the Consumer Price Index. A. Guaranteed Purchase Option B. Return of Premium Rider C. Waiver of Premium Rider D. Cost of Living Rider
Cost of Living Rider
24-hour care coverage differs from a standard disability policy in that it: A. Covers both occupational and nonoccupational medical expense claims B. Covers nonoccupational injuries or illnesses C. Provides only 24 hours of medical treatment per covered injury or illness D. Includes a shorter pre-existing condition exclusion period and shorter elimination period
Covers both occupational and nonoccupational medical expense claims
Workers covered by SDI (State Disability Insurance) are covered by two programs: A. Social Insurance and Paid Family Leave B. Disability Leave and Temporary Leave C. Disability Insurance and Paid Family Leave D. Social Insurance and Temporary Leave
Disability Insurance and Paid Family Leave
Insurance companies writing disability income generally have an occupational classification system based on considerations of all of the following, except: A) Stability of the industry B) Earning potential C) Job duties D) Claims history of the occupation
Earning potential
nsurance companies writing disability income generally have an occupational classification system based on considerations of all of the following, except: A. Earning potential B. Claims history of the occupation C. Job duties D. Stability of the industry
Earning potential
Stephen must be disabled 60 days before he will receive any benefits from his disability policy. This 60-day period is the: A. Waiting Period B. Probationary Period C. Elimination Period D. Policy Period
Elimination Period
The ___________ Guarantees that on specified dates, ages or occurrences, the insured may purchase additional monthly benefits, if income justifies it, without proof of insurability A. Guaranteed Purchase Option B. Return of Premium Rider C. Waiver of Premium Rider D. Cost of Living Rider
Guaranteed Purchase Option
The optional disability income insurance rider which waives the elimination period if the insured is hospitalized and pays only when the insured is being treated as an inpatient is the __________ __________ rider.
Hospital confinement
Which optional disability income insurance rider waives the elimination period if the insured is hospitalized and pays only when the insured is being treated as an inpatient. A. Hospital confinement B. Impairment C. Non-disabling injury D. Cost-of-living
Hospital confinement
Which one of the following statements regarding Workers' Compensation and Social Security Disability Income (SSDI) is false? A. The individual or group benefit will be reduced dollar-for-dollar by the amount of Workers' Compensation benefits paid, so that the total disability income benefit payable from all sources combined will not exceed the amount that would be payable by the individual or group disability policy on its own B. SSDI benefits are secondary to Workers' Compensation and any other public insurance benefits C. If the total of SSDI, Workers' Compensation, and other public disability benefits exceeds 50% of the worker's pre-disability earnings, the SSDI benefit will be reduced $2 -for- $1 until the 50% limitation is reached D. Workers' Compensation benefits are primary to either individual or group disability income benefits
If the total of SSDI, Workers' Compensation, and other public disability benefits exceeds 50% of the worker's pre-disability earnings, the SSDI benefit will be reduced $2 -for- $1 until the 50% limitation is reached (If the total of SSDI, Workers' Compensation, and other public disability benefits exceeds 80% of the worker's pre-disability earnings, the SSDI benefit will be reduced dollar-for-dollar until the 80% limitation is reached.)
Attaching a(n) ___________ rider excludes coverage for a condition that would otherwise be covered. A. Lifetime benefit B. Waiver C. Rehabilitation benefit D. Impairment
Impairment
Which rider would eliminate coverage for a preexisting condition? A. Lifetime Benefit Rider B. Impairment Rider C. Guaranteed Purchase Option D. Return of Premium Rider
Impairment Rider
Own occupation is the: A. Inability to perform all duties of any occupation for which one is qualified based upon education, training, and experience B. Presumption an individual is disabled due to the loss of sight, hearing, speak, or the loss of 2 limbs C. Inability to perform all duties of one's own occupation D. Inability to perform one or more duties of one's occupation
Inability to perform all duties of one's own occupation
The change of occupation provision in a disability income policy is designed to protect the: A. Insurer if the insured changes occupations without notifying the insurer. B. Insured's beneficiaries C. Insured D. Insured's employer
Insurer if the insured changes occupations without notifying the insurer. This could result in a change of benefits depending on the new occupation, or the insurer could change the amount of premium to fit the occupational rating for the current level of benefit. The more hazardous the occupation, the less benefit and/or the higher the premium. Consideration is also given to any hazardous hobbies or avocations which would affect the rating or require an exclusion rider.
If the insured changes occupations after the policy is issued, which of the following statements is correct? A. The policy is already in force and will continue unchanged B. The policy is no longer applicable so a new policy must be drafted C. It could result in a change of benefits depending on the new occupation, or the insurer could change the amount of premium to fit the occupational rating for the current level of benefit
It could result in a change of benefits depending on the new occupation, or the insurer could change the amount of premium to fit the occupational rating for the current level of benefit
The optional guaranteed purchase option rider allows the insured to purchase additional coverage in all of the following situations, except: A) Marriage B) Birth of a child C) Job Change
Job change
What type of disability income insurance pays a benefit to a business to help in the search, cost, and hiring of a replacement when an employee becomes disabled and is unable to work for the company? A. Buy-sell B. Reducing term C. Key employee D. Business overhead expense
Key employee
Which of the following disability income benefit periods will result in the highest premium? A. Age 65 B. 5 years C. 2 years D. Life
Life (The benefit period is the time period the insured is eligible to receive payments after the elimination period has been met. The benefit period may be written for a specified number of years (2, 5, or 10 years), to age 65, or for life. The longer the potential benefit period, the higher the premium.)
The two categories of Group Disability Income policies are: A. Long-Term and Short-Term B. Partial and Residual C. Medicare and Social Security D. Sickness or Accidental
Long-Term and Short-Term
Martha's Disability Income policy contains a definition of 'Presumptive Disability'. Each of the following situations would meet this definition, except: A) Loss of two or more limbs B) Loss of sight C) Loss of hearing D) Loss of a finger
Loss of a finger
Martha's Disability Income policy contains a definition of 'Presumptive Disability'. Each of the following situations would meet this definition, except: A. Loss of speech B. Loss of hearing C. Loss of sight D. Loss of a finger
Loss of a finger (Presumptive Disability involves the loss of two or more limbs, not the loss of a finger.)
24-Hour Care Coverage in California is designed to: A. Raise revenue for the California Department of Insurance B. Lower to the cost of health insurance provided to employees C. Increase the revenues of domestic insurers D. Lower the cost of Workers' Compensation and health insurance coverage for employers
Lower the cost of Workers' Compensation and health insurance coverage for employers
All of the following are 'statutory claims' for benefits under most states' Workers' Compensation laws, except: A. Rehabilitation B. Maternity C. Disability D. Survivors
Maternity (There are 4 'statutory claims' for benefits under most states' Workers' Compensation laws: Disability Income, Rehabilitation (job retraining), Medical Expenses, and Survivors Income (including a burial benefit).)
Which of the following is a limited form of medical expense coverage added to a disability income policy? A. Additional monthly benefit rider B. Social insurance supplement rider C. Hospital confinement rider D. Non-disabling injury rider
Non-disabling injury rider (A Non-Disabling Injury Rider does not pay disability income, but pays medical expenses related to an injury that does not result in total disability (emergency room, x-rays, durable medical equipment, etc.). It is a limited form of medical expense coverage added to a disability income policy.)
All disability policies cover ___________________________ disabilities, which are those occurring outside work. A. Occupational B. Noncontributory C. Contributory D. Nonoccupational
Nonoccupational (All disability policies cover nonoccupational injuries and illnesses. Occupational policies also cover work-related disabilities, which is important for self-employed persons, highly paid employees, and persons with very specialized skills (such as physicians, accountants, engineers, attorneys).)
SDI benefits received for a period of disability are ________ as income, but benefits received for time off under the Paid Family Leave program are _________ as income. A) Not taxable, federally taxable B) Not taxable, taxed by the state C) Taxable, federally taxable D) Taxable, taxed by the state
Not taxable, federally taxable
In underwriting disability income, the insured's ___________ is the single most important rating factor because a worker in America is more likely to suffer a disability than die prior to age 65. A. Number of quarters paid into social security B. Pre-tax (Gross) Income C. Occupation D. Marital status
Occupation
Ole Olson owns a Business Overhead Expense Policy whereby if he should become disabled, the policy will continue to cover most business expenses in his absence. The policy would cover all of the following, except: A. Ole's office rent B. Ole's personal lost income C. Ole's utility bills D. Ole's employee payroll
Ole's personal lost income
Ole Olson owns a Business Overhead Expense Policy whereby if he should become disabled, the policy will continue to cover most business expenses in his absence. The policy would cover all of the following, except: A. Ole's personal lost income B. Ole's utility bills C. Ole's office rent D. Ole's employee payroll
Ole's personal lost income (The intent of the policy is to offset expenses, not to replace the disabled owner's personal lost income. If Ole is concerned about his own personal lost income, he should own an individual Disability Income policy.)
When it comes to receiving disability income benefits, an individual may be entitled to income from more than one source, so benefits are coordinated between individual and group insurance and other sources of insurance to prevent: A. Profiteering B. Duplication of benefits C. Integration of benefits D. Overinsurance
Overinsurance
All of the following statements regarding 'own occupation' total disability are true, except: A) Requires the insured's inability to perform the main duties of own occupation B) Typically reserved for more skilled occupations and may result in a higher premium C) Often applies for the first 2 years of a disability, then changes to any occupation D) Own occupation is more restrictive than 'any occupation' and harder to qualify for benefits
Own occupation is more restrictive than 'any occupation' and harder to qualify for benefits
A Business Overhead Expense policy, as a form of disability insurance, provides payments for all of the following, EXCEPT _____________. A) Owner's income B) Taxes C) Rent/Utilities D) Employee wages
Owner's income
A Business Overhead Expense policy, as a form of disability insurance, provides payments for all of the following except _________________________. A. Taxes, utilities, rent B. Raw materials used to manufacture goods sold C. Owner's income D. Employee wages
Owner's income (A Business Overhead Expense policy will not pay the wages of the business owner. By paying the other expenses of the business, the business can remain financially stable until the owner is able to return to work.)
All of the following are correct concerning partial disability, except: A. Partial disability payments are usually 75% of the total disability benefit B. It pays a benefit for the duration of the disability following the elimination period, subject to any limitation on the benefit period C. Partial disability is an inability to perform one or more of the regular duties of an occupation D. Partial disability payments are either based on the percentage of lost wages, or a flat 50% of the total disability benefit
Partial disability payments are usually 75% of the total disability benefit
All of the following are correct concerning partial disability, except: A. Partial disability is an inability to perform one or more of the regular duties of an occupation B. Partial disability benefits are referred to as "at-work" benefits C. Partial disability payments are usually 75% of the total disability benefit D. Partial disability benefits are typically paid for 3 to 6 months
Partial disability payments are usually 75% of the total disability benefit (Partial disability is an inability to perform one or more of the regular duties of an occupation. Partial disability benefits are referred to as "at-work" benefits, since the insured is still able to work and receive benefits. The benefit usually pays up to 50% of a total disability benefit for a period of 3 to 6 months.)
An insured owns a disability income policy that has a waiver of premium rider in the event he/she suffers a total disability. 5 years after the issuance of the policy, the insured suffers a disability and is unable to work for 18 months before returning to work. The rider has a 3 month waiting period. Which of the following best describes the benefits of the waiver of premium rider? A. The first 3 months premium waived B. All premiums will be waived during the period of disability except for the first 3 months C. Since the disability was not permanent, no benefits are received from the rider D. Premiums will be waived retroactively to the beginning of the disability
Premiums will be waived retroactively to the beginning of the disability (The insured would have had to have paid the first three months premium until he/she was on claim, then the company would have refunded those premiums and waived the rest of the premiums while he was still on claim.)
The social insurance supplement (SIS) rider reduces overinsurance by matching Social Security as closely as possible and was developed by: A. Private insurers B. State government C. Federal government D. Non-profit organizations
Private insurers
Which statement is false regarding Social Security Disability benefits? A. To collect disability benefits, an employee must be unable to engage in any kind of gainful work because of a medically determined physical or mental condition that has lasted, or is expected to last, at least 12 months or to result in death B. Qualification for benefits is contingent only upon the employee's having 45 work credits and being unable to perform his or her usual job C. The benefit for a qualifying disabled worker is a percentage of the PIA D. The waiting period is 5 months
Qualification for benefits is contingent only upon the employee's having 45 work credits and being unable to perform his or her usual job (For Social Security Disability benefits, the proper insured status is either 'fully' insured (40 credits) or 'currently' insured (a sliding scale of credits based on age), and the disability must last 12 months or be expected to result in death. In addition to satisfying the 5-month waiting period, the person must be unable to perform 'any substantial gainful activity)
Penelope received benefits from her disability policy and went back to work. After 30 days she found she was not able to work and began to immediately receive her disability payments. Which of following provisions made this possible? A. Second Injury Provision B. Presumptive Disability Provision C. Residual Disability Provision D. Recurrent Disability Provision
Recurrent Disability Provision
A disability that is presumed to result from the same or a related cause of prior disability is a ________________. A. Presumptive disability B. Delayed disability C. Recurrent disability D. Residual disability
Recurrent disability
The _________ ___________ provision states that if there is a second disability due to the same cause within a specified period, the elimination period will be waived.
Recurrent disability
A disability that is presumed to result from the same or a related cause of prior disability is a _____________. A. Presumptive disability B. Delayed disability C. Recurrent disability D. Residual disability
Recurrent disability (A disability that was believed to have been resolved, but which returns within a stated period of time (such as 6 months) is known as a recurrent disability.)
An insured took out a disability income policy while working in a low hazardous occupation. When filing a claim for disability income benefits, after a job related accidental injury, the insurance company discovered the insured changed jobs 2 years prior to the loss. The new job would have been classified as more hazardous. The insurance company will most likely: A. Pay the benefit as contracted for since the policy is over two years old B. Reduce the benefit to an amount the actual premium paid would have purchased under the proper job classification C. Reduce the benefit payment dollar for dollar to account for the premium underpayment D. Pay no benefit since the insured failed to inform the insurance company on a timely basis of the change in occupation
Reduce the benefit to an amount the actual premium paid would have purchased under the proper job classification
Which of the following are ways that the insurer can issue disability income coverage for a substandard risk? A) Rated up in age, graded benefit, temporary lien B) COLA waiver, future purchase waiver, waiver of premium C) Higher premium, higher benefit, shorter elimination period D) Reduced benefit, higher premiums, rider excluding coverage
Reduced benefit, higher premiums, rider excluding coverage
Which of the following are ways that the insurer can issue disability income coverage for a substandard risk? A. Rated up in age, graded benefit, temporary lien B. COLA waiver, future purchase waiver, waiver of premium C. Higher premium, higher benefit, shorter elimination period D. Reduced benefit, higher premiums, rider excluding coverage
Reduced benefit, higher premiums, rider excluding coverage
All of the following are common exclusions and limitations that apply to disability income policies, except: A) Regular fare-paying passengers on a commercial airline B) Attempted suicide and intentional self-inflicted injuries including intoxication or misuse of prescription medication C) Foreign travel D) Pre-existing conditions as defined in the contract
Regular fare-paying passengers on a commercial airline
To reduce its exposure to claims from a substandard disability risk, an insurer may take all of the following actions, except: A) Charge additional premium B) Reduce the amount of benefit C) Increase the elimination period D)Remove all of the exclusion riders
Remove all of the exclusion riders
To reduce the risk of insuring a substandard disability applicant, an insurer may take all of the following actions, except: A) Charge additional premium B) Increase the elimination period C) Remove all of the exclusion riders D) Reduce the amount of benefit
Remove all of the exclusion riders
Which provision provides a loss of earnings benefit to an employee who returns to work after sustaining a total disability, if the insured's earnings are less than they were before the disability. A. Restorative Disability B. Residual Disability C. Recurrent Disability D. Presumptive Disability
Residual Disability
The elimination period in a disability income insurance policy: A) Defines what causes of loss are eliminated from potential claim payment B) Describes how long the policy must be in force before claims can be considered C) Addresses where accidents and sicknesses must not occur in order for a claim to be payable D) Serves as a time deductible before benefits are payable
Serves as a time deductible before benefits are payable
The elimination period in a disability income insurance policy: A. Defines what causes of loss are eliminated from potential claim payment B. Describes how long the policy must be in force before claims can be considered C. Addresses where accidents and sicknesses must not occur in order for a claim to be payable D. Serves as a time deductible before benefits are payable
Serves as a time deductible before benefits are payable
Which measure could an underwriter use to reduce the risk when underwriting a Disability Income Policy? A. Increase the benefit period and increase the amount of the benefit B. Shorten the elimination period and increase the amount of the benefit C. Increase the benefit period and shorten the elimination period D. Shorten the benefit period and increase the elimination period
Shorten the benefit period and increase the elimination period
The guaranteed purchase option (guaranteed insurability, future increase) rider guarantees that the insured may purchase additional monthly benefits without proof of insurability based on all of the following occasions, except: A. Specified holidays B. Specified dates C. Specified ages D. Specified occurrences
Specified holidays
The type of disability that impairs an insured's ability to work but a full recovery is expected is considered: A) Temporary B) Permanent C) Partial D) Total
Temporary
All of the following are true regarding 24-Hour Care Coverage in California, except: A) Life agents desiring to sell the coverage are required to obtain 4 hours of Continuing Education credits in Workers' Compensation Insurance B) It is designed to lower the cost of Workers' Compensation and health insurance coverage for employers in California C) The 24-Hour Care Coverage product may include the sale of life insurance D) It is designed to be a seamless system to provide both occupational and nonoccupational coverage
The 24-Hour Care Coverage product may include the sale of life insurance
Most employers in California must participate in the State Disability Insurance (SDI) Program unless a voluntary plan has been approved by the: A. The California Department of Insurance B. The California Managed Health Care Division C. The California Employment Development Division
The California Employment Development Division
Which one of the following regarding the State Disability Insurance (SDI) program is true? A. The State Disability Insurance (SDI) program benefits received for a period of disability and benefits received for time off under the Paid Family Leave program are federally taxable as income B. The State Disability Insurance (SDI) program benefits received for a period of disability are not taxable as income, but benefits received for time off under the Paid Family Leave program are federally taxable as income C. The State Disability Insurance (SDI) program benefits received for a period of disability and benefits received for time off under the Paid Family Leave program are not federally taxable as income D. The State Disability Insurance (SDI) program benefits received for a period of disability are taxable as income, but benefits received for time off under the Paid Family Leave program are not federally taxable as income
The State Disability Insurance (SDI) program benefits received for a period of disability are not taxable as income, but benefits received for time off under the Paid Family Leave program are federally taxable as income
All of the following statements about the future increase option rider are true, EXCEPT: A) Additional coverage obtained will be based on the insured's attained age premium rates B) The additional coverage is available at each option date regardless of the insured's current earned income C) It enables an insured to purchase additional disability insurance protection regardless of insurability at specified future dates D) To guard against overinsurance the insurer will limit that amount of additional coverage that can be applied for on each option date
The additional coverage is available at each option date regardless of the insured's current earned income
All of the following statements about the future increase option rider are true EXCEPT: A. The additional coverage is available at each option date regardless of the insured's current earned income B. Additional coverage obtained will be based on the insured's attained age premium rates C. To guard against overinsurance the insurer will limit that amount of additional coverage that can be applied for on each option date D. It enables an insured to purchase additional disability insurance protection regardless of insurability at specified future dates
The additional coverage is available at each option date regardless of the insured's current earned income (The insured's current earned income must warrant the additional coverage applied for on the option date otherwise it will not be issued. This is to guard against overinsurance.)
Which statement is false concerning Social Security disability benefits? A. The employee must only be unable to engage in his/her own occupation to be considered disabled B. Benefits may only start after 5 full calendar months of disability, and are not retroactive to the date of disablement C. To be fully insured for disability benefits, the employee must be either fully or currently insured under the Social Security system D. The amount of the benefit is based on the employee's Primary Insurance Amount
The employee must only be unable to engage in his/her own occupation to be considered disabled (The employee must be unable to engage in any kind of gainful employment, not just his/her own occupation.)
Which one of the following statements about occupations, hobbies, and avocations in regards to disability income insurance policies is FALSE? A. The more hazardous the occupation the higher the premium B. The more hazardous the occupation the less benefits will be offered C. The less hazardous the occupation, hobby, or avocation the more likely a rating or an exclusion will be part of the policy D. The less hazardous the hobbies or avocations the lower the premium
The less hazardous the occupation, hobby, or avocation the more likely a rating or an exclusion will be part of the policy
Which of the following regarding the additional monthly benefit (AMB) rider is not correct? A. Some insurers refer to the this rider as a Social Security Rider as it pays benefits while the insured is awaiting Social Security Benefits B. The long-term benefit of the rider can supplement only a government benefit plan C. The rider does not consider the amount of a Social Security Benefit, it is strictly in addition to all other disability benefits D. The rider is not related to Social Security, therefore, the rider is used to define the benefit
The long-term benefit of the rider can supplement only a government benefit plan
Which of the following would be considered a presumptive disability? A. The loss of sight in an eye B. The loss of a leg below the knee C. The partial loss of hearing in an ear D. The loss of the ability to speak
The loss of the ability to speak
Which of the following is NOT a reason that insurers limit disability income benefits to 70% or less of the insured's past earnings? A) To keep their expenses down B) To account for other sources of income the insured may have during a disability C) To prevent overinsurance D) To discourage malingering
To keep their expenses down
Which of the following is not a reason that insurers limit disability income benefits to 70% or less of the insured's past earnings? A. To prevent overinsurance B. To keep their expenses down C. To account for other sources of income the insured may have during a disability D. To discourage malingering
To keep their expenses down
Josh is a concert pianist and earns a very good living with his talent. He was in a car accident and broke his arm. His disability is considered: A. Total, temporary B. Total, partial C. Partial, temporary D. Temporary only
Total, temporary (Temporary disability may be total or partial, depending on the person's ability to work or not. A professional pianist with a broken arm would not be able to perform, and would be considered totally disabled for a temporary period of time.)
Under which provision will a disability policy provide benefits if the insured is totally disabled because of donating an organ to another individual?
Transplant
In addition to language similar to the any occupation definition of total disability, Social Security's definition of disability also includes which of the following statements? A. Unable to sit, stand, or line down for extended periods of time B. Unable to perform any substantial gainful activity C. Unable to qualify for benefits under any personal or state-sponsored disability insurance plan D. Unable to perform more than 50% of one's customary duties
Unable to perform any substantial gainful activity (Social Security's definition of disability includes the statement about unable to perform any substantial gainful activity, which makes qualifying for SSDI benefits difficult in many cases.)
In the event total disability continues beyond a specified period of time, future premiums will not be required to be sent in to the insurer for the duration of the disability. This optional rider is called the _________ rider. A. Lifetime benefit B. Return of premium C. Impairment D. Waiver of premium
Waiver of premium
All of the following are possible business uses of Disability Income Insurance, except: A) Buy-Sell B) Workers' Compensation C) Key Employee Insurance D) Business Overhead Expense
Workers' Compensation
_______________ is insurance provided by an employer to cover injuries that occur on the job only. A. Group accidental death and dismemberment B. Group health insurance C. Workers' Compensation D. Group disability income
Workers' Compensation
The social insurance supplement (SIS) rider pays in addition to regular disability policies until: A) Workers' Compensation or Social Security disability payments begin B) Retirement benefits begin C) Supplemental Security Income begins D) Unemployment benefits begin
Workers' Compensation or Social Security disability payments begin
The social insurance supplement (SIS) rider pays in addition to regular disability policies until: A. Retirement benefits begin B. Workers' Compensation or Social Security disability payments begin C. Unemployment benefits begin D. Supplemental Security Income begins
Workers' Compensation or Social Security disability payments begin
All of the following are possible business uses of Disability Income Insurance, except: A) Key Employee Insurance B) Buy-Sell C) Workers' compensation D) Business Overhead Expense
Workers' compensation
