Chapter 5-Disability Income and Related Insurance ExamFx quizzes

presumptive disability

varies by company, but generally includes a total loss of sight, speech, hearing or the use of any two limbs.

An employee is injured in a construction accident, rendering him unable to work for a year. Which of the following plans would provide him with medical expense coverage and income assistance?

workers compensation

The minimum number of credits required for partially insured status for Social Security disability benefits is

6 credits

Group long-term plans provide monthly benefits usually limited to

60% of the individual's income.

If an employer provides long-term group disability insurance for its employees, what percentage of monthly wages are lower-paid employees eligible to collect?

66 2/3% If an employer provides long-term group disability insurance for its employees, the benefit period may be limited to age 65, and benefits will be limited to 50% of the monthly wages for higher-paid employees and 66 and 2/3% of the monthly wages for lower-paid employees.

In disability income insurance, if an insured is considered disabled if they cannot perform any job they are suited for by prior education, training or experience, they fall under which definition of total disability?

any occupation

Workers Compensation benefits are regulated by which entity?

state government

The buy-sell coverage benefits are

tax free

The benefits for individual disability plans are based on

-flat amount Group disability plans usually specify the benefits based on a percentage of the worker's income, while individual policies usually specify a flat amount.

While repairing the roof of his house an insured accidentally falls off and breaks his arm and sustains a head injury that results in total blindness of both eyes. His policy contains an Accidental Death & Dismemberment Rider. What is the extent of benefits that he will receive?

-principal sum If the insured dies, the insurer pays the full amount, also known as the "principal sum", which is also paid if the insured loses sight in both eyes or loses two limbs. If the insured lives but loses a hand or foot or the sight in one eye, the insured will be paid a percentage of the principal sum, usually 50%, which is called the "capital sum".

What is the shortest possible elimination period for group short-term disability benefits provided by an employer?

0 days

An insured's disability income policy includes an additional monthly benefit rider. For how many years can the insured expect to receive payment from the insurer before Social Security benefits begin?

1 year

What is the maximum period that an insurer would pay benefits in accordance with an Additional Monthly Benefit rider?

1 year

A client has a new individual disability income policy with a 20-day probationary period and a 30-day elimination period. Ten days later, the client breaks their leg and is off work for 45 days. How many days of disability benefits will the policy pay?

15 days

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 the insured be receiving benefits under an "own occupation" disability plan?

2 years

In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is

Broader in General. A policy that uses the accidental bodily injury definition will provide broader coverage than a policy that uses the accidental means definition.

A small hardware store owner is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability?

Business overhead expense policy

An insured wants to buy a disability income policy that pays a maximum monthly benefit of $1,200. To make sure that the disability benefit keeps up with inflation, the insured would need to add

Cost of Living Rider

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

Disability Buy-Sell

Which of the following statements about occupational vs. nonoccupational coverage is TRUE?

Disability insurance can be written as occupational or nonoccupational

In disability income insurance, the time between the onset of an injury or sickness and when benefits begin is known as the

Elimination period

An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?

Full benefits

In which of the following health plans are benefit payments attributed to employer contributions taxable to the employee?

Group Disability Income

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

Key employee disability insurance

What type of benefit helps to pay for accidental injuries that are not severe enough to qualify as disabilities?

Medical Reimbursement Benefit

Bethany studies in England for a semester. While she is there, she is involved in a train accident that leaves her disabled. If Bethany owns a general disability policy, what will be the extent of benefits that she receives?

None, since GD does not cover war, military service, intentional injuries, overseas residence, or felony injuries

The coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insured's employment is called

Nonoccupational coverage.

After the elimination period, a totally disabled insured qualified and started receiving benefits from his disability income policy that has a waiver of premium rider. What will most likely happen to the premiums paid into the policy during the elimination period?

Premiums will be refunded

Which of the following are the main factors taken into account when calculating residual disability benefits?

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?

Presumptive disability

Short-term disability plans are not ________________

Renewable

Your client has a Social Insurance Supplement (SIS) rider on his disability policy. After he becomes disabled, he receives payments from the company. Shortly thereafter, he also begins receiving Social Security benefit payments. Which of the following will happen?

The SIS payment will be reduced dollar-for-dollar by the Social Security benefit payment.

Which statement accurately describes group disability income insurance?

The extent of benefits is determined by the insured's income.

In a disability policy, the elimination (or waiting) period refers to the period between

The first day of disability and the day the insured starts receiving benefits

An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true?

The group plan will not pay because the employee was injured at work.

In which of the following cases would an "any occupation" disability income policy pay the benefits?

The insured is unable to perform any jobs in the field related to the insured's education and experience.

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?

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.

If a policy is rated-up, which of the following is true?

The premium increases

The amount of Social Security disability benefits is based upon the worker's Primary Insurance Amount (PIA), which is calculated from their Average Indexed Monthly Earnings over which years? Which years of income may be deleted from calculation?

Their highest 35; lowest 5

On a disability income policy that contains the "own occupation" definition of total disability, the insured will be entitled to benefits if they cannot perform

Their regular job

Which of the following is true regarding benefits paid to disabled employees?

They may be subject to taxation if the premium was paid by the employer.

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

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

Income replacement contracts agree

To replace the insured's income up to a stated percentage if the insured suffers a loss due to a covered accident or sickness.

Under what condition are group disability income benefits received by an employee NOT taxable as income?

When the benefits received are equal or less than the employee's percentage of the contribution

In disability income insurance, the own occupation definition of disability applies

for the first 2 years of a disability

Under which of the following disability income plans would the benefits be subject to income tax?

group

Under workers compensation, which of the following benefits are covered...

medical and rehabilitation benefits, income benefits, and death benefits are all included.

An insured has health insurance that covers them at work and at home. This policy was written on what basis?

occupational

What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before a loss can be covered?

probationary period