Disability Income Insurance

T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?

Less than $5,000 per month benefit regardless of the cause

Which of these statements concerning an individual Disability Income policy is TRUE? -Premiums are normally tax-deductible -Age of the insured determines the amount of the benefits -Normally includes an Elimination period -Benefits are normally taxable

Normally includes an Elimination period

A Disability Income policyowner suffers a disability which was due to the same cause as a previous disability. Both disabilities occurred within a five-month period. The insurer may cover the second disability without a new elimination period under the

Recurrent Disability provision

T was insured under an individual Disability Income policy and was severely burned in a fire. As a result, T became totally disabled. The insurer began making monthly benefit payments, but later discovered that the fire was set by T in what was described as arson. What actions will the insurer take?

The insurer will rescind the policy, deny the claim, and recover all payments made

Non-occupational disability coverage is designed for

employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation

Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?

Applicant's monthly income

In a Disability Income policy, which of these clauses acts as a deductible?

Elimination Period

When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following?

Residual disability

Disability policies do NOT normally pay for disabilities arising from which of the following? -Accidents - War -Negligence -Sickness

War