Health Insurance Chapter 5 Disability Income and Related Insurance

Which of the following disability income policies would have the highest premium? A 15-day waiting period / 5-year benefit period B 15-day waiting period / 10-year benefit period C 30-day waiting period / 10-year benefit period D 30-day waiting period / 5-year benefit period

15-day waiting period / 10-year benefit period - The waiting, or elimination, period is the time from the onset of disability the insured must wait before becoming eligible for benefits. The shorter the waiting period, the higher the premium. After the insured satisfies the waiting period, they will receive benefits from the insurer for a limited benefit period. The longer the benefit period, the higher the premium. A disability income policy that includes the shortest waiting period and the longest benefit period would be most expensive.

If an employer provides long-term group disability insurance for its employees, what percentage of monthly wages are lower-paid employees eligible to collect? A 33 and 1/3% B 50% C 66 and 2/3% D 90%

66 and 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? A Any occupation B Typical C Statutory D Own occupation

Any occupation - For disability income benefits to be paid, the insured must whatever definition of total disability is stated in the policy, which varies. The "any occupation" definition states that an insured is disabled if they cannot perform any job that they are suited for by prior education, training or experience. The "own occupation" definition states that an insured is disabled if they cannot perform their own job, whatever that may be.

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 the injury or sickness. C The longer the waiting period, the lower the premium. D Coverage applies both on and off the job.

Coverage applies both on and off the job. - Employees who are injured on the job are covered by Workers Compensation insurance. Group Disability Income insurance is designed to cover employees only while they are off the job, so the coverage is considered to be nonoccupational in nature.

What type of health insurance policy provides an employer with funds to train a replacement if a valued employee becomes disabled? A Group Disability B Disability Buy-Sell C Business Overhead D Key Person Disability

Key Person Disability - Key person disability is purchased by the employer on the life of a key employee to cover the expense of hiring and training a replacement for the key person.

Under a disability income policy, the insurer does not pay a monthly benefit that is equal to the insured's previous income. The reason for paying a benefit amount that is less than the insured's income is to A Prevent the insured from obtaining excess insurance. B Enable the insurer to provide affordable coverage. C Enable the insurer to reduce variable costs. D Prevent overutilization and malingering.

Prevent overutilization and malingering. - The insurer wants the insured to have a financial incentive to return to work.

Income replacement contracts agree A To replace income if the head of the household is the primary insured, and he/she loses income due to a lay-off. B To cover any accident on the job, but not accidents outside of his/her job. C To replace the insured for his/her company, including hiring and training wages. D To replace the insured's income up to a stated percentage if the insured suffers a loss due to a covered accident or sickness.

To replace the insured's income up to a stated percentage if the insured suffers a loss due to a covered accident or sickness. - Income replacement contracts agree to replace the insured's income, considering all sources of income, up to a stated percentage if the insured suffers a loss due to a covered accident or sickness.

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

Welfare benefits. - Social Security is an entitlement program, not a welfare program.

In order to collect Social Security disability benefits, the claimant must be able to demonstrate that the disability will last at least A For life. B 12 months. C 24 months. D Until age 65.

12 months. - Social Security disability benefits are paid to claimants whose disability is expected to last at least 12 months or lead to death.

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

2 years- Under an Own Occupation plan, if the insured cannot perform his/her current job for a period of up to two years, disability benefits will be issued, even if the insured would be capable of performing a similar job during that two-year period. After that, if the insured is capable of performing another job utilizing similar skills, benefits will not be paid.

Social Security was created to protect against all of the following EXCEPT A Bad investment choices. B Sickness in old age. C Premature death. D Disability.

Bad investment choices. - Social Security is a Federal program enacted in 1935, that is designed to provide protection, for eligible workers and their dependents, against financial loss due to death, disability, superannuation (retirement income), and sickness in old age.

In a Disability Income policy, all of the following are considered presumptive disabilities EXCEPT A Loss of one eye. B Loss of hearing. C Loss of two limbs. D Loss of speech.

Loss of one eye. - The definition of a presumptive disability varies by company, but generally includes a total loss of sight, speech, hearing or the use of any two limbs.

Which of the following is considered a presumptive disability under a disability income policy? A Loss of one hand or one foot B Loss of two limbs C Loss of one eye D Loss of hearing in one ear

Loss of two limbs - Presumptive disability is a provision that is found in most disability income policies that specifies conditions that will automatically qualify the insured for full disability benefits, such as the loss of two limbs.

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

Recurrent disability. - Recurrent disability is the period of time (usually within 3-6 months) during which the recurrence of an injury or illness will be considered as a continuation of a prior period of disability.

The primary purpose of disability income insurance is to? A. reimburse loss of income to a family due to the death of the insured B. Replace income lost due to a disability

Replace income lost due to a disability

Workers compensation insurance covers a worker's medical expenses resulting from work related sickness or injuries and covers loss of income from A Temporary job layoffs. B Work-related disabilities. C Job termination. D Plant or office closings.

Work-related disabilities. - All states have workers compensation laws, which were enacted to provide mandatory benefits for employee's work related injuries, illnesses, or death.