Module 10

Question 1

This depends on your insurance policy. It can be not being able to work in “your occupation” for 2 years or not being able to work in “any occupation”.

Answer 1

The definition of disability

Question 1

Social Security in the U.S., which is a comprehensive federal benefits program that provides benefits to retirees, disabled people, and their survivors.

Answer 1

Old-Age, Survivors, and Disability Insurance (OASDI)

Question 2

This is also known as the waiting period for private long-term disability insurance. It typically is 6 months but can be up to a year.

Answer 2

The elimination period (in disability insurance):

Question 3

The amount of time for which an individual can receive disability benefits.

Answer 3

The benefit period (in disability insurance)

Question 4

A rider that increases disability payments over time based on a measure of an increasing cost of living.

Answer 4

Cost of living adjustments (COLAs)

Question 5

Provisions that offset the carrier’s disability payment if the participant receives disability-based income support from another source such as SSDI, workers’ comp, pension benefits, etc.

Answer 5

Benefit offset provisions in disability insurance

Question 6

A policy designed to provide income replacement when a disabling impairment precludes work for a limited time.

Answer 6

Short-term disability

Question 7

California, Hawaii, New Jersey, New York, Rhode Island, the U.S. Territory of the Commonwealth of Puerto Rico, and the railroad industry.

Answer 7

Non-federal government entities with temporary disability insurance (TDI)

Question 8

Due to illness or accidental injury, you are not able to perform the material and substantial duties of your regular occupation for wage or profit.

Answer 8

“Own occupation” definition of disability

Question 9

Disability exists when you are incapable of performing any job for which you are reasonably qualified based on your education, training, or experience

Answer 9

“Any occupation” definition of disability

Question 10

A policy that can be continued if one leaves their employer. Group disability policies aren’t portable.

Answer 10

Portability

Question 11

These programs help reintegrate those who were out on disability leave back into the workplace.

Answer 11

Return-to-work programs

Question 12

This pays for time, medical care, and survivor benefits for work-related incidents.

Answer 12

Workers’ Compensation

Question 13

This is the most common disability payment.

Answer 13

Temporary Total Disability

Question 14

Workers return to work gradually with reduced responsibilities and lower salaries. This coverage makes up some of the difference in wages.

Answer 14

Temporary Partial Disability

Question 15

The worker has permanent impairments that, although partial, limit the worker’s ability to work.

Answer 15

Permanent Partial Disability

Question 16

Eligible employees of covered employers are entitled to take unpaid, job-protected leave for specified family and medical reasons.

Answer 16

Family and Medical Leave Act (FMLA)

Question 17

An informal program that allows employers to manage short-term absences not covered by Workers’ Compensation.

Answer 17

Salary continuation program

Question 18

Employers must annually estimate the accrued liability for benefits (such as a self-funded short-term disability program), reserve funds for it, and report it in annual financial statements.

Answer 18

FAS 112 requirements

Question 19

When employees aren’t subject to proof of good health, these provisions limit/exclude benefits for a period of time to minimize adverse selection in voluntary plans.

Answer 19

Preexisting condition exclusion

Question 20

Employers fund this benefit. They pay the premium and consider it a business expense.

Answer 20

Funding of workers’ compensation benefits

Question 21

There is a 5-month waiting period. Social Security will pay starting the sixth full month after disability began.

Answer 21

Social Security Disability Insurance waiting period

Question 22

A rider that assures the policyholder of the right to renew the policy. An insurer can still increase premiums by class.

Answer 22

Guaranteed renewable

Question 23

This allows a disabled claimant to return to work part-time and receive a partial disability payment if continuing to be partially disabled.

Answer 23

Residual or partial disability rider

Question 24

A rider that gives the insured the right to purchase additional insurance later.

Answer 24

Additional purchase options (APOs)

Question 25

A rider that obliges the insurer to refund a portion of premium if no claims are made for a period of time specified in the policy.

Answer 25

Return of premium

Question 26

This clause waives premium payment on a policy after a specified period of time once one is disabled (for example, after 90 days).

Answer 26

Waiver of premium provision

Question 27

A retroactive termination due to alleged misrepresentation of fact.

Answer 27

Rescissions of coverage

Question 28

A medically determinable physical or mental impairment expected to last at least one year or expected to result in death.

Answer 28

Inability to engage in any substantial gainful activity (SGA)

Question 29

A federal program funded by payroll taxes to insure workers against severe disabilities.

Answer 29

Social Security Disability Insurance (SSDI)

Question 30

A means-tested (needs-based) government program for those with income and assets below certain mandated thresholds.

Answer 30

Supplemental Security Income (SSI)

Question 31

Permanent disability benefits become payable if the employee has not made a full recovery, but the condition has stabilized.

Answer 31

Permanent and stationary

Question 32

Which of the following statements about the taxation of LTD and STD benefits is false?

A. Only the amount over 100% of the former salary is taxable.

B. The employee can pay for the benefit with after-tax or before tax dollars.

C. LTD paid with after-tax dollars is not subject to ordinary income tax.

D. Social Security and unemployment taxes do not apply to LTD.

E. LTD is subject to income tax due to employer-paid premiums.

Answer 32

A. Only the amount over 100% of the former salary is taxable.

Question 33

What is the waiting period for Social Security disability payments?

A. 0 Months
B. 12 Months
C. 5 Months
D. 3 Months
E. 6 Months

Answer 33

C. 5 Months

Question 34

Which of the following is true about sick days?

A. There must be at least 5 sick days offered each year.

B. There must be at least 10 sick days offered each year.

C. Employers have no federal mandate to provide sick days.

D. There must be at least 3 sick days offered each year.

E. There must be at least 8 sick days offered each year.

Answer 34

C. Employers have no federal mandate to provide sick days.

Question 35

Workers’ compensation benefit terms include all of the following, EXCEPT:

A. Temporary total work-related disability
B. Temporary partial work-related disability
C. Permanent total non work-related disability
D. Permanent total work-related disability
E. Permanent Partial work-related disability

Answer 35

C. Permanent total non work-related disability

Question 36

All of the following are advantages of salary continuation programs, EXCEPT:

A. It’s not subject to ERISA reporting and disclosure requirements.

B. Employees may conserve their sick days for extended disability protection.

C. It’s not subject to fiduciary standards.

D. The employer has the burden of making determinations regarding disability criteria and duration of disability.

Answer 36

D. The employer has the burden of making determinations regarding disability criteria and duration of disability.

Question 37

All of the following are provisions an employer may implement to avoid adverse selection in a voluntary long-term disability program, EXCEPT:

A. There may be a preexisting condition exclusion provision.

B. Enrollment in the plan may be subject to evidence of insurability.

C. There’s an extended waiting period for this type of program.

D. The employer may cap the amount of benefits paid.

Answer 37

C. There’s an extended waiting period for this type of program.

Question 38

Private sector approaches to providing income protection in the event of disability do not include which of the following?

A. Sick leave/personal time
B. Long-term disability (LTD)
C. Unpaid time off
D. Short-term disability (STD)
E. Voluntary coverage

Answer 38

C. Unpaid time off