Chapter 8 Flashcards
(19 cards)
Define mortality risk
The risk of a particular individual dying, at any given time, when compared to other individuals of the same age in sex.
Define morbidity risk
The risk of a particular individual contracting a disease, injury, accident, or other disabling condition at any given time when compared to other individuals of the same age or sex.
Are living benefit claims taxable?
They are non-taxable if the premiums have been paid with after tax dollars. If premiums have been deducted for tax/business purposes policy, benefits would usually be taxable.
What are the three types of renewability provisions for individual disability insurance?
- Conditionally renewable
- Guaranteed renewable.
- Non-cancelable
Can changes be made to a conditionally renewable disability policy?
Yes, the company can change the premium or cancel the policy. The policy can only be canceled for all policyholder within a specific class. Some contracts can include provisions for cancellation or adjustment of a single individuals policy under certain circumstances like if an individuals occupation were to change to and otherwise uninsurable occupation under the company guidelines.
Can a guaranteed renewable disability policy be canceled
No, it cannot be canceled. Have any changes made to its provisions or additional restrictions applied provided the premium is paid on time.
Describe the underwriting for a guaranteed renewable disability policy
Underwriting is less restrictive than with non-cancelable policies and can be offered to individuals who do not qualify for non-cancelable policy coverage.
The non-cancelable policy is the most strictly underwritten as it represents the greatest race to the company. As long as the premium is paid on time, the company cannot do what?
- Increase the premium or add any additional charge for the policy without the agreement of the policy owner
- Change or add any provision or restriction to the policy.
- Cancel the policy, regardless of changes in the insured occupation or health.
Does the non-cancelable policy have a time limit?
Yes, usually to age 65 most of these plans can be continued to be on the insurance age of 65 as long as the premiums are paid on time and the insured continues to work full-time
What is the definition of total disability?
There are three definition categories own occupation, regular occupation, and any occupation.
What is total disability for own occupation?
Is the inability to perform the important duties of the insurance occupation due to injury or sickness while under the care and attendance of a legally qualified medical practitioner. Individuals can be disabled from their occupation and working in another job/capacity while receiving claim benefits.
What is the definition of total disability for regular occupation?
It is almost identical to that for own occupation. The difference is that the insured is in eligible for disability benefits, if able to work in an occupation for which that individual has been educated trained, or has experience with respect to the duties required under that specific job.
What is the definition of disability for any occupation?
It is the least liberal of the three disability types. This definition is based on the insurance ability to work in any reasonable occupation.
What is a loss of income policy?
The amount paid is based on proportionate loss of income rather than the loss of ability to perform duties.
What are some typical exclusion riders and limitations for disability products?
- An act or accident of war, declared or undeclared or due to any type of military conflict.
- Normal pregnancy or childbirth.
- Committing or attempting to commit a criminal offense or engaging in an illegal occupation.
- Donor transplant surgery in which a part of the insurance body is transplanted into another person during the first six months the policy is in force.
- Cosmetic surgery during the first six months the policy is in force.
What does an office overhead expense disability policy cover
rent, property, taxes, utilities, depreciation, lease, and rent equipment, business liability, insurance, dues for professional associations, interest on debt, accounting fees, certain employee, wages, other fixed expenses, customary in the operation of business.
What are the three different forms of benefit payment for a buy- sell disability insurance agreement?
- Lump sum that pays the benefit all out at once
- Monthly benefit payment
- Combo lump sum and monthly benefit payment.
What is long-term care insurance?
It provides payment for ongoing care of an individual who is unable to live independently, typically manifested by the inability to perform two or more activities of daily living and or the presence of cognitive impairment
