Disability Income
What type of health insurance policy provides an employer with funds to train a replacement if a value employee becomes disabled? a. key person disability b. group disability c. disability buy-sell d. business overhead
A
Which of the following are the main factors taken into account when calculating residual disability benefits? A. present earnings and earnings prior to disability B. earnings prior to disability and length of disability C. employee's full-time status and length of disability D. present earnings and standard cost of living
A
Which rider, when added to a disability income policy, provides for changes in the benefits payable based on changes in the consumer price index? a. COLA b. waiver of premium c. social security d. guaranteed insurability
A
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? a. premiums will be waived b. premiums will be refunded c. premiums will be retained by the company, but no further premium will be required for the duration of the disability d. premiums will be prorated
B
Regarding the taxation of Business Overhead Policies a. premiums are not deductible, but expenses paid are deductible b. premiums are deductible and benefits are taxed c. premiums are not deductible and benefits are taxed d. premiums are not deductible, but benefits are deductible
B
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters? a. 4 credits b. 6 credits c. 10 credits d. 40 credits
B
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. enable the insurer to reduce variable costs B. prevent overutilization and malingering C. prevent the insured from obtaining excess insurance D. enable the insurer to provide affordable coverage
B
All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT a. fully insured status b. waiting period of 5 months c. being age 65 d. inability to perform gainful work
C
An insured owns a medical expense policy that he purchased for his family. The insured's employer purchased a Group Disability income policy for the insured and all eligible employees. The insured subsequently suffered an accident on the job that left him unable to work for four months. If the insured receives benefits from his disability income policy, which of the following would be true? a. benefits from employer contributions are not taxable b. the insured can deduct his medical expense benefits from his income tax c. benefits received that are attributable to employer contributions are fully taxable to the employee as income d. premiums the insured paid for his medical expense policy are normally deductible from his income
C
Which of the following is NOT a characteristic of group LT disability plan? a. the benefit period may be to age 65 b. the benefit can be up to 66 and 2/3% of one's monthly income c. the benefit can be up to 50% of one's yearly income d. the elimination period is the same as in the short-term plan's benefit period
C
Which of the following statements about occupational vs. nonoccupational coverage is true? a. individual disability policies never cover nonoccupational injuries b. only group disability income policies can be written on an occupational basis c. disability insurance can be written as occupational or nonoccupational d. group medical expense policies and individual medical expense policies always cover both occupational and nonoccupational injuries
C
An insured purchased a disability income policy with a 10-year benefit period. The policy stated a 20 day probationary period for illness. If the insured is hospitalized with an illness 2 weeks after the policy was issued, how much will the policy pay? a. the insured will receive a return of premium b. it will pay up to 10 years of benefits c. it will pay until the insured is released from the hospital d. nothing; illness is not covered during the first 20 days of the contract
D
In a disability policy, the elimination (or waiting) period refers to the period between a. the effective date of the policy and the date the first premium is due b. coverage under a disability policy and coverage under SS c. during which any specific illness or accident is excluded from coverage d. the first day of disability and the insured starts receiving benefits
D
Under which of the following disability income plans would the benefits be subject to income tax? a. individual b. key person c. partnership buy-out d. group
D
All of the following benefits are available under SS except: a. welfare b. old-age and retirement c. disability d. death
a
In which of the following cases would an "any occupation" disability income policy pay the benefits? a. the insured is unable to perform any jobs in the field related to the insured's education and experience? b. the insured is unable to perform the duties of his or her specific occupation c. the insured changes jobs and is injured as a result of a more hazardous occupation d. the insured's family has unexpected expenses due to the insured's disability
a
What is the elimination period for SS disability benefits? a. 5 months b. 6 months c. 12 months d. 3 months
a
What type of benefit helps to pay for accidental injuries that are not severe enough to qualify as disabilities? a. medical reimbursement benefit b. partial disability c. basic accidental injury d. accidental death and dismembermnet
a
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? a. 10 days b. 15 days c. 25 days d. 45 days
b
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? a. grace period b. probationary period c. contestable period d. elimination period
b
If an employer provides LT 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%
c
Which of the following factors does an insurer use the most to determine the extent of disability benefits that it will promise in a contract? a. insured's moral history b. insured's hobbies c. insured's income d. insured's marital status
c
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? a. 5 b. 3 c. 2 d. 1
d
