Course 15

What are residual disability income insurance payments based on? -A flat benefit amount stated in the policy -50% of the full disability amount -The amount of the insured's income is reduced by the disability -The insured must be totally disabled

"The amount of the insured's income is reduced by the disability" 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 isable to work and earn some income.

Allen has a disability income policy with a $2,500 monthly benefit and a 30-day elimination period. He is unable to work 90 days following an automobile accident. What will the policy pay? $0 $2,5000 $5,000 $7,500

"$5,000" 90 days - 30 day elimination period is 60 days (2 months). 2 months X $2,500/month benefit =$5,000 total benefit paid.

Which of the following is a characteristic of the disability elimination period? -Benefits are optionally payable -Benefits are conditionally payable -Benefits are unconditionally payable -Benefits are not payable

"Benefits are not payable". The elimination period is the time immediately following the start of a disability when benefits are not payable. The elimination period in a disability income policy serves the same purpose as a deductible.

Which of the following is NOT a provision in a disability income policy? -Change of occupation provision -Recurrent disability provision -Deductible and coinsurance provision -Elimination period provision

"Deductible and coinsurance provision". Disability income policies do not contain deductible and coinsurance provisions.

Manuel is considered to be a disabled person as defined by the Americans with Disabilities Act (ADA). As such, he is unable to perform any of the following life activities EXCEPT -Communicating -Breathing -Driving -Hearing

"Driving" Major life activities include, but are not limited to, caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working.

Which of the following could lower the premium of a proposed disability income policy? -Increase in the elimination period -Decreasing the elimination period -Increasing the benefit period -Selecting an "own-occupation" clause instead of an "any-occupation" clause

"Increasing the elimination period". The elimination period is the time immediately following the start of a disability when benefits are not payable. The longer the elimination period, the lower the premium for comparable disability benefits.

Which type of disability would be less than total impairment and equal to permanent impairment? -Partial total disability -Permanent partial disability -Residual partial disability -Temporary partial disability

"Permanent partial disability" Permanent disability that is less than total impairment and equal to permanent impairment is the definition of permanent partial disability.

Dyan is considered partially disabled by her insurance company. Whichof the following BEST describes her situation? -She is working part-time and receiving lost income under her long-term disability benefit -She has lost hearing in one ear because of an accident on the job -She is unable to work and receiving workers' compensation -Her employer pays half of her disability benefit

"She is working part-time and receiving lost income under her long-term disability benefit" Partial disability is the inability of the insured to perform one or more important duties of the job or the inability to work at that job on a full-time basis, either ofwhich results in a decrease in income.

Jonas has disability insurance through his employer. The employer pays 75% of the premium, and Jonas pays the other 25%. What is jonas's tax liability for any benefits paid from the disability plan? -Taxes must be paid on all benefits received -No taxes are payable on any benefits received -Taxes must be paid on 25% of the benefits received -Taxes must be paid on 75% of the benefits received

"Taxes must be paid on 75% of the benefits received". In this situation, the insured must pay taxes on 75% of the benefits received.

Under a disability income insurance policy, which criteria must be metfor "bodily injury" to be classified as accidental? -Only the result need be of natural cause -Only the cause need be accidental -Both the injury and the cause need be accidental -The cause may be intentional, but the result must be accidental

"The cause may be intentional, but the result must be accidental" The term "accidental bodily injury~~ is defined asan unforeseen and unintended event that happens at a known place at a known time. While the cause may be intentional, the result must be accidental.

The elimination period in a disability income policy serves the same purpose as -a deductible -coinsurance -an elective indemnity -waiver of premium

"a deductible" The elimination period is the time immediately following the start of a disability when benefits are not payable. The elimination period in a disability income policy serves the same purpose as a deductible.

A rehabilitation benefit is intended to -prepare the insured to return to employment -minimize the insurer's liability -give the insured time to find a new career -increase the overall benefits given to the insured

"prepare the insured to return to employment " A rehabilitation benefit is designed to help prepare the insured to return to employment.

An individual covered under a disability income policy may be eligible for a partial disability benefit if -the insured can perform some of their job activities on a part-time basis -the insured cannot perform any of their job activities -the cause of disabilty was from an accident only -the insured is enrolled in a rehabilitation program

"the insured can perform some of their job activities on a part-time basis" Partial disability is the inability of the insured to perform one or more important duties of the job or the inability to work at that job on a full-time basis, either ofwhich results in a decrease in income

Kim is insured under a disability income insurance policy with an "own-occupation" clause. She was recently injured in an automobile accident and can no longer perform the tasks of her job. Kim is now considered to be -short-term disabled -temporarily disabled -partially disabled -totally disabled

"totally disabled" The own occupation definition of total disability requires that the insured be unable to perform the insured's current occupation as a result of an accident or sickness.

Which of these statements is NOT true concerning recurrent disabilities? -The insurer continues coverage after a new elimination period -The recurrence of a disability must occur within a specified time period after the prior disability -Are current disability is considered to be a continuation of the prior disability -The recurrent disability must be caused from the original disability

The insurer continues coverage after a new elimination period". The recurrent disability insurance provision is designed to make sure that a person does not have to go through more than one elimination period within a certain period of time.