CH9: Disability Income and Related Insurance

What is the shortest possible elimination period for group short-term disability benefits provided by an employer? A 0 days B 30 days C 60 days D 90 days

A 0 days

Benefit periods for individual short-term disability policies will usually continue from A 6 months to 2 years. B 2 years to age 65. C 1 week to 4 weeks. D 3 months to 3 years.

A 6 months to 2 years.

What type of benefit helps to pay for accidental injuries that are not severe enough to qualify as disabilities? A Medical Reimbursement Benefit B Partial Disability C Basic Accidental Injury D Accidental Death & Dismemberment

A Medical Reimbursement Benefit

Which of the following are the main factors taken into account when calculating residual disability benefits? A Present earnings and earnings prior to disability B Earnings prior to disability and the length of disability C Employee's full-time status and length of disability D Present earnings and standard cost of living

A Present earnings and earnings prior to disability

Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe? A Presumptive disability B Dismemberment disability C Partial disability D Residual disability

A Presumptive disability

All of the following benefits are available under Social Security EXCEPT A Welfare benefits. B Old-age and retirement benefits. C Disability benefits. D Death benefits.

A Welfare benefits

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 Loss B Business Disability C Individual Disability D Management Loss

B Business Disability

A 37-year-old owns a policy with a Guaranteed Insurability Rider. The policyowner would like to increase the benefit amount offered by the policy. What documentation will be required? A Attending physician's report B No documentation C Proof of insurability D Medical records

B No documentation

When an insurer combines two periods of disability into one, the insured must have suffered a A Presumptive disability. B Recurrent disability. C Partial disability. D Residual disability.

B Recurrent disability.

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.

A single mother wants to make sure that if she is unable to work for health reasons, she and her child would be protected financially. Which of the following insurance plans would best suit her needs? A Accidental death & dismemberment B Total disability plan C Workers compensation D Comprehensive health insurance plan

B Total disability plan

An insured was involved in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "own occupation" disability plan? A She would not receive any benefits. B 3 years C 2 years D 1 month

C 2 years

What provision can reduce the disability benefit based upon the insured's current income? A Pro rata provision B Rehabilitation benefit C Relation of earnings to insurance D Waiver of monthly premium

C Relation of earnings to insurance

An insured has a Social Insurance Supplement rider in her disability income plan. Following a disability, she begins receiving benefit payments from the insurer. She then begins receiving Social Security benefits that are smaller than the SIS benefit payments. At that point, her insurer ends the SIS benefit payments. Which of the following best describes the situation? A Although a mistake may have occurred, the insured has no recourse. B This is typical of an SIS rider. C The insured should contact the insurer to confirm her actual Social Security benefit amount. The SIS rider should pay the difference between the rider amount and the actual benefit. D Miscommunication. The proper authorities should be notified in order to end Social Security payments so that the SIS rider will continue to pay.

C The insured should contact the insurer to confirm her actual Social Security benefit amount. The SIS rider should pay the difference between the rider amount and the actual benefit.

What is the number of credits required for fully insured status for Social Security disability benefits? A 4 B 10 C 30 D 40

D 40

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

D 5 months

Underwriting for disability insurance is unique due to the type of risk involved. Which of the following situations illustrates this? A A stunt person pays a low premium and receives a superior classification of disability. B An attorney pays a higher premium and receives a poorer classification of disability. C A secretary pays a higher premium and receives a superior classification of disability. D A construction worker pays a higher premium and receives a poorer classification of disability.

D A construction worker pays a higher premium and receives a poorer classification of disability.

All of the following apply to short-term disability plans EXCEPT A Group plans can provide benefit periods of up to 52 weeks. B Individual plans can provide benefit periods of up to 2 years. C A benefit period of 26 weeks is most common for group plans. D Both group and individual plans are renewable.

D Both group and individual plans are renewable.

Under which of the following disability income plans would the benefits be subject to income tax? A Individual B Key person C Partnership buy-out D Group

D Group

An insured purchased a disability income policy with a 10-year benefit period. The policy stated a 20-day probationary period for illness. If the insured is hospitalized with an illness 2 weeks after the policy was issued, how much will the policy pay? A The insured will receive a return of premium. B It will pay up to 10 years of benefits. C It will pay until the insured is released from the hospital. D Nothing; illness is not covered during the first 20 days of the contract.

D Nothing; illness is not covered during the first 20 days of the contract.

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

D Taxable income to the employee.

If a business wants to buy a disability income policy on a key employee, which of the following is considered the beneficiary? A The insurer B The employee C The producer D The employer

D The employer

all of the following are true about group disability income insurance EXCEPT: a. benefits are usually short-term b. the waiting period starts at the onset of injury or sickness c. the longer the waiting period, the lower the premium d. coverage applies both on and off the job

d. coverage applies both on and off the job

In the event of a loss, business overhead insurance will pay for: a. loss of profits b. salary of the business owner c. medical bills of business owner d. rent

d. rent