Chapter 04

Question 1

Elimination Period (Waiting Period)

Answer 1

Time deductible

Question 2

Partial Disability

Answer 2

50%

Question 3

Residual Disability

Answer 3

Not ready to return to work after all

Question 4

Residual Disability

Answer 4

Not ready to return to work after all

At work benefits

Question 5

Recurrent Disability

Answer 5

At work benefits

Question 6

e single most important rating factor of disability income underwriting

Answer 6

occupation

Question 7

What happens if you make a claim and failed to disclose a change in occupation

Answer 7

Reduces benefit that would have been appropriate for the occupational hazard change in proportian to the pemium you paid
Get what you paid for

Question 8

Common Exclusions

Answer 8

■ Aircraft, except for passengers on a regularly scheduled flight
■ War or acts of war
■ Attempted suicide or self-inflicted injuries
■ Normal pregnancy
■ Pre-existing conditions
■ Commission of a felony

Question 9

Underwriting Group Disability Plans

Answer 9

guard against adverse selection and overinsurance.
no medical underwriting.
only on a nonoccupational basis
Most insurers require that a minimum number of employees participate
in a group plan

Question 10

The Age Discrimination in Employment Act (ADEA)

Answer 10

Cannot pay a higher rate than younger folk

Question 11

Short-Term Disability (STD)

Answer 11

not pay benefits for disabilities lasting
longer than 2 years
The elimination period may be as short as zero days for accidents and 7 days for sickness but is
rarely more than 15 or 30 days.
Benefits are typically paid weekly and range from 50% to 100% of the individual’s income.

Question 12

Long-Term Disability (LTD)

Answer 12

The elimination period will most commonly be either 30, 60, 90 or 180 days
Benefit amounts are usually limited to typically 2/3 of the participant’s income.
Benefits stated in
a policy are the maximum benefit amounts and maximum period of time covered.

Question 13

Business Overhead Expense

Answer 13

owner cannot collect for loss of income under this policy, only cover biz expenses

Question 14

Cost Of Living Rider

Answer 14

protects the insured against inflation

Question 15

Guaranteed Purchase Option (Guaranteed Insurability, Future Increase) Rider

Answer 15

Can purchase more insurance after key date (age) or event (kid, marriage)

Question 16

Waiver Of Premium Rider

Answer 16

Waive premiums after elimination period

Question 17

Impairment Rider

Answer 17

Eliminates coverage for pre-existing conditions,

rider may make insurance obtainable for an otherwise uninsurable person.

Question 18

Return of Premium Rider

Answer 18

typically after 10 years.
 insurer will
provide a refund of 80% of premiums paid in to that point less any dollar amounts paid out in
claims
higher premiums

Question 19

What is required for Workers Comp

Answer 19

bodily injury and or occupational diseases that arise

from and in the course of employment.

Question 20

Workers Comp: Medical Benefits

Answer 20

Unlimited as to time, but dollar amounts payable may be limited by law

Question 21

Workers Comp: Scheduled Injury

Answer 21

This for that; set benefit for set permanent partial injuries

Question 22

Social Security Disability Insurance: What is fully insured

Answer 22

(40 quarters or credits), 10 years of entire work history

Question 23

Workers Comp: Total Disability

Answer 23

The benefit amount is subject to maximum and minimum weekly limits

Question 24

Workers Comp: Partial Disability

Answer 24

–Benefits restore a percentage of lost wages.

Question 25

Social Security Disability Insurance: Definition of Disability

Answer 25

unable to engage in any substantial gainful activity due to a medically determined physical or mental condition that has lasted or is expected to last at least 12 months or result in an early death.

Question 26

Social Security Disability Insurance: What is the waiting period

Answer 26

benefits start with the 6th full calendar month of disability and are not retroactive to the date of disablement. ndividual must be disabled prior to the first day of a month and remain disabled through the last day of a month (a person first disabled after midnight on the first day of a month will not begin a full month of disability until the first day of the following month).

Question 27

Disability Income Benefits

Answer 27

Based on the employee’s average indexed monthly earnings on which Social Security taxes have been paid. This is referred to as the Primary Insurance Amount (PIA).

Question 28

What is the Total Amount Family can get in PIA

Answer 28

The employee is eligible for 100% of the PIA. A spouse and other dependents (parents or children) may be eligible for up to 50% of the amount of the disability benefit received by the disabled individual. A spouse caring for the worker’s unmarried child who is under age 16 or was disabled before age 22 also receives a benefit equal to 50% of the employee’s PIA. Unmarried children under age 18 (or 19 if still in high school) or if disabled prior to age 22 are also eligible for a benefit equal to 50% of the employee’s PIA. The total dollar limit is 150 - 180% of the employee’s disability benefits.

Question 29

What is the Coordination of Benefits (CoB)

Answer 29

SSDI benefits are secondary to Workers’ Compensation and any other public insurance benefits. If the total of SSDI, Workers’ Compensation, and other public disability benefits exceeds 80% of the worker’s pre-disability earnings, the SSDI benefit will be reduced dollar-for-dollar until the 80% limitation is reached.