Chapter 13: Disability Insurance

What type of health insurance policy provides an employer with funds to train a replacement if a valued employee becomes disabled?

Key Person Disability

Insurance that would pay for hiring a replacement for an important employee who becomes disabled is called

Key person disability

Which is the following applies to partial disability benefits?

Payment is limited to a certain amount of time

Regarding the taxation of business overhead policies

Premiums are deductible and benefits are taxed

Certain conditions such as dismemberment or total and permanent blindness will automatically qualify for full disability benefits. What provision does this fall under?

Presumptive Disability

Any Occupation disability typically means that an individual is unable to perform their occupation by all of these EXCEPT

preference

How is the amount of Social Security disability benefits calculated?

It is based upon the worker's Primary Insurance Amount (PIA) which is calculated from their Average Indexed Monthly Earnings over the highest 35 years

What is the number of credits required for fully insured status for Social Security benefit status?

40

What is the elimination period for Social Security Disability Benefits?

5 Months

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?

Business Disability

A policy available to business owners that provide payment for normal business expenses in the event that the owner is disables is called

Business Overhead Expense

All of the following are true about Group Disability Income Insurance EXCEPT:

Coverage applies both on and off the job

Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?

Disability buy-sell

Which statement accurately describes group disability income insurance?

The extent of benefits is determined by the insureds income

When purchasing an occupational disability income policy, each of the following factors may be used to establish the premium except

The number of dependents the insured has

What is the purpose of the rehabilitation benefit in disability insurance?

To cover the expenses of retraining the insured to return to work

an insured is involved in a car accident. in addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive presumptive disability payments?

no benefits -presumptive benefit plans offer full benefits for specified conditions. typically require loss of two limbs, total and permanent blindness, loss of speach.