Chapter 4 - Disability Income and Related Insurance

Question 1

A period of time during which benefits are paid under the policy

Answer 1

Benefit period

Question 2

A portion of the principal sum of a health insurance policy; paid for accidental dismemberment of loss of sight in one eye

Answer 2

Capital Sum

Question 3

Salary, wages, or commissions; but not income from investments, unemployment benefits and similar sources of income

Answer 3

Earned Income

Question 4

Insurance that exceeds in amount the actual value of the person or property insured or insurance in a greater amount than the insured can afford

Answer 4

Overinsurance

Question 5

The amount of coverage paid for an accidental death under a health insurance policy

Answer 5

Principal Sum

Question 6

Fully insured or currently insured, depending on the number of coverage credits earned.

Answer 6

Social Security Disability Insured Status

Question 7

A qualified expense that may reduce the amount of income subject to taxation

Answer 7

Tax Deductible

Question 8

Subject to taxation

Answer 8

Taxable

Question 9

Inability of the insured to perform any occupation for which he or she is reasonable suited by reason of education, training, or experience

Answer 9

Total disability

Question 10

Relinquishment of a right or Interest

Answer 10

Waiver

Question 11

Replaces lost income in the event of disability and no longer being able to work

Answer 11

Disability Income

Question 12

Disability Income benefits are based on a _____ of past income. Typically an average wage of 24 months from time of incident.

Answer 12

Percentage

Question 13

Disability income benefits pay at a percentage (never in full) of current income to incentivize you to _____

Answer 13

return to work

Question 14

Total disability will have varying descriptions from one ______ to a next

Answer 14

company

Question 15

Inability to perform either any gainful occupation or the major duties of the insured’s regular occupation or an occupation for which the insured is qualified by education or experience

Answer 15

Total Disability

Question 16

a disability policy that is more favorable to the insured

Answer 16

any occupation

Question 17

A disability policy that reduces the insurers liability

Answer 17

own occupation

Question 18

Inability to perform on or more of the regular duties of ones occupation or inability to work on a full-time basis

Answer 18

Partial disability

Question 19

Partial disability benefits are typicall ___ % of total disability benefit

Answer 19

50

Question 20

Partial disability is limited to a certain _______ of _____

Answer 20

Period of time

Question 21

Partial disability benefits are paid in a ____ of _____ amount

Answer 21

flat or residual

Question 22

specifies conditions that will automatically qualify the insured for full disability benefits

• provides benefits for dismemberment
• Total and permanent blindness
• loss of speech
• loss of hearing

Answer 22

Presumptive disability

Question 23

loss of use of any two limbs

Answer 23

dismemberment

Question 24

It is presumed that this disability will not be reversed and waives the need to go see a doc every 6 months to determine continued disability

Answer 24

presumptive disability

Question 25

specifies conditions that will automatically qualify the insured for full disability benefits

Answer 25

Presumptive disability

Question 26

specifies the period of time during which the recurrence of an injury or illness will be considered a continuation of a prior period of disability. - requiring no new elimination period - Usually 3-6 months

Answer 26

Recurrent disability

Question 27

Provides benefits for loss of income when a person returns to work after a total disability but is unable to work as long or at the same level as he or she could before becoming disabled

Answer 27

Residual Disability

Question 28

When does disability begin?

Answer 28

on the date of the event the caused the disability

Question 29

The period of time you must wait before you begin to get paid on your disability

Answer 29

elimination (waiting) period

Question 30

Longer elimination period = _____ premium

Answer 30

lower

Question 31

Longer benefit period = ______ premium

Answer 31

higher

Question 32

Are there benefits for short term disability within disability income policy?

Answer 32

No

Question 33

Disability income policy will pay to a ____ years or the the age of _____

Answer 33

limited or maximim / 65

Question 34

in the event of a permanent or total disability, premiums will be _____ for the duration of the disability

Answer 34

Waived

Question 35

How long must you typically be disabled to receive waiver of premium

Answer 35

usually 3-6 months

Question 36

Waiver of premium is ______ if necessary. The premium paid during the waiting period must be paid but then is reimbursed.

Answer 36

retroactive

Question 37

a feature Included with guaranteed renewable and noncancellable disability income policies

Answer 37

Waiver of premium

Question 38

If you qualify for ssi your waiting period is

Answer 38

5 months

Question 39

social security benefit is base on your _____

Answer 39

PIA - principal insurance amount

Question 40

Social security disability benefits _____ when you either retire, benefits start or when your disability ends.

Answer 40

stop paying

Question 41

Business disability that covers expenses for hiring and training replacement - Business is owner and beneficiary.

Answer 41

Key Person

Question 42

Business disabiliity specifies how the business will pass between owners in the event of disability of one owner / lump-sum benefit for a buyout

Answer 42

disability buy-sell

Question 43

business disability that pays for rent, utlities, employee, salaries, etc. - meant for small business

Answer 43

business overhead expense

Question 44

What portion, if any, of the individual disability income policy benefits are taxed to the insured?

Answer 44

disability benefits are not income taxable

Question 45

Provision found in most disability income policies that specifies the conditions that will automatically qualify for full disability benefits

Answer 45

presumptive disability provision

Question 46

After the elimination period, a totally disabled insured qualified for benefits from a disability income policy that has a waiver of premium rider. What will happen to the premium that was paid into the policy during the elimination period?

Answer 46

Premium will be refunded

Question 47

What does the amount of disability benefit that an insured can receive depend on?

Answer 47

The insured's income at the time of policy application

Question 48

With key person disability insurance, who pays the policy premiums?

Answer 48

The business / employer

Question 49

What type of health insurance would pay for hiring a replacement for an important employee who becomes disabled?

Answer 49

key-person disability insurance

Question 50

What type of health insurance is sold to small business owners to reimburse them for the overhead expenses?

Answer 50

BOE - Business overhead expense insurance

Question 51

Insured's inability to perform duties of his or her current job or an occupation for which the insured is educated and trained.

Answer 51

Own Occupation Disability

Question 52

What type of disabilities will be covered by occupation coverage

Answer 52

Disabilities that result from accidents or sickness that occur on or off the job

Question 53

What type of insurance covers an employee who is hurt on the job?

Answer 53

Workers compensation

Question 54

What is the term for a period of time immediately following a disability during which benefits are not payable?

Answer 54

Elimination period

Question 55

What entity regulates workers compensation benefits?

Answer 55

State government

Question 56

Specifies how the business will pass between owners when one of them dies or becomes disabled.

Answer 56

Buy-Sell agreement

Question 57

What benefit is based on a primary insurance amount (PIA)

Answer 57

Social Security disability benefit

Question 58

What is another name for Old Age, survivors, and disability insurance benefits?

Answer 58

Social Security

Question 59

A waiver of premium provision may be included with what type of health insurance policies?

Answer 59

Disability Income

Question 60

How can an AD&D Policy be written?

Answer 60

As a rider to a health insurance policy, or as a separate policy

Question 61

How can an AD&D Policy be written?

Answer 61

As a rider to a health insurance policy, or as a separate policy

Question 62

What are the four types of workers compensation benefits?

Answer 62

Medical income rehabilitation death benefits

Question 63

How does someone qualify for social security disability income benefits?

Answer 63

The insured must have the proper insured status (such as fully insured), meet the definition of disability, and satisfy the waiting period

Question 64

What is the primary purpose of disability income insurance?

Answer 64

To replace income lost due to disability

Question 65

specifies period of time during with the recurrence of an injury or illness will be considered a continuation of a prior disability

Answer 65

recurrent disability

Question 66

Period after the policy starts during which benefits wont be paid for illness related disabilities

Answer 66

probationary period

Question 67

Length of time monthly disability benefit payments last

Answer 67

benefit period

Question 68

Maximum benefits an insurer is willing to accept for an individual risk; based on a percentage of insured's past earnings

Answer 68

benefit limitations

Question 69

What are the two types of group dissability

Answer 69

Short term disability and long term disability

Question 70

benefit period no longer than 2 years

Answer 70

short term disability

Question 71

elimination period may last as long as the benefit period for short term. - benefit period may last until age 65 - usually reserved for management employees

Answer 71

Long term disability

Question 72

to qualify for social security benefits must have ___ credits in the ___ quarter period

Answer 72

6 / 13

Question 73

To qualify for social security benefits there is a ___ month waiting period

Answer 73

5

Question 74

to be covered by workers comp you must work in an occupation that is ______

Answer 74

covered by workers comp

Question 75

benefits paid in response to work related injuries

Answer 75

workers comp

Question 76

fault or negligence may not be a factor in being eligible for ____

Answer 76

workers comp

Question 77

what 4 kind of benefits are paid out by workers comp

Answer 77

medical, income, death, and rehab

Question 78

In disability income insurece, the own occupation definition of disability applies for the first ______ of a disability

Answer 78

2 years

Question 79

coverage will apply only if the insured cannot find any means of income whatsoever. This is more or less strict than the other option.

Answer 79

Any Occupation - More strict

Question 80

When a person merely has to prove that they cannot perform the job for which they were previously trained

Answer 80

Own occupation - less strict

Question 81

In a plan funded entirely by the employer, income benefits are included in the employee's _______ and taxed as ordinary _____

Answer 81

gross income; income

Question 82

coverae provided by a disability income policy that does not pay benefits for losses occuring as the result of the insureds employment

Answer 82

nonoccupational coverage

Question 83

if a policy is rated-up the _____ increases

Answer 83

premium

Question 84

What is the maximum period that an insurer would pay benefits in accordance with an additional monthly benefit rider?

Answer 84

1 year

Question 85

Stipulates that the insurer will pay benefits comparable to what social security would pay. After a years' time the insurer ends the benefit and assumes that social security will then begin benefit payment.

Answer 85

additional monthly benefit rider

Question 86

True or False: Group disability income coverage applies both on and off the job

Answer 86

False; employees on the job are covered by workers comp.

Question 87

A worker is _____ insured under social security if the worker has accumulated the required number of credits based on his/her age

Answer 87

fully

Question 88

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

Answer 88

presumptive disability

Question 89

Under own occupation, if the insured cannot perform his or her current job for a period of up to ______, disability benefits will be issued, even if the insured would be capable of performing similar job during that two year period. After that, if the insured is capable of performing another job utilitzing similar skills, benefits will not be paid.

Answer 89

own occupation

Question 90

True or False: General disability policies covers losses caused by war, military service, intentional self inflicted injuries, overseas residence, or injuries suffered while committing or attempting to commit suicide

Answer 90

False