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General exlusion riders and limitations are often applied to disability products. Various exclusion riders provide that benefits will not be payable if a disability occurs second to what?

1. an act or accident of war or military conflict.
2. committing or attempting to commit a felony or engaging in an illegal occupation
3. normal pregnancy or childbirth
4. transplant surgery where a part of the body is transplanted into another person while the policy is in force (usually 6 months)
5. comestic surgery, during the first 6 months the policy is in force.


What is the purpose of Key Person Insurance?

to product a business and replace lost profits in the event of a the loss of a key employee.
1.portion of the employees salary is taken into consideration when determining the faceamount.


Who is a key employee?

a person/employee who is considered a valuable asset to the organization and a necessity for its successful operation.


what is the purpose of office overhead expense policies?

to reimburse covered fixed business expenses during the disability of the insured owner.
- based on actual covered expenses incurred by the bussiness during each month of disability.,


What covered expenses are normally included in an office overhead expense policy?

1. rent
2. property tax
3. utilities
4. depreciation
5. leased and rented equipment
6. business liability insurance
7. dues for prefessional associations
8. interest on debt
9. accounting fees
10. certain employee wages
11. other fixed expenses customary in the operation of the business.


Which definition of total disability is seen with overhead policies?

typically own, or regular
waiting periods can be 30, 60, 90 dats, and benefit periods are 12, 15, 18, or 24 months.

Usually a 20K max per mon th benefit.


What are some criteria points in a Disability Buy-Sell policy?

1. funds a buy-sell agreement, which will detail the procedure to follow.
2. legally enforceable contract between >1 individual.
3. will define how long a TD must last befor a buy-sell is triggered, and how a TD is defined/determined.
4. agreement should specify how the business will be valued at any future point in time, and the terms of ownership transfer and payement.


What are 3 different forms of benefit payments in terms of a buy-sell disability poilicy?

1. lump sum that pays the benefit out all at once
2. monthly benefit payment
3. combination of a lump sum or monthly benefits.


Underwriting of a DI
- medical assessment

1. more restrictive u/w
2. specific medical impairements are seen more risky.
3. APS and reports are very important to asses morbidity.


What are some medical impairement examples that increase the chance of disability but do not affect the mortality?

1. back and vision problems
2. mental/nervous
3. arthritis
4. CTS


What should be considered when u/w a DI in terms of avocation?

1. hazardous spots can warrent modifications to DI policies.
2. extream sports need to be reviewed carefully.
3. ^ risk of a disability injury due to avocation on DI policies are more conservative than those for other insurance products.


An individuals occupation and duties are important factors in determining what 4 u/w basic procedures

1. if they are eligible for DI
2. type of products available
3. amount of coverage
4. rates to be charged.


Actuarial rating tables segment the working population into how many occupational classifications and why

Typically 5-6, based on the incidence of disability for each occupation.
- some occupation require more thanone class d/t the variation within the duties .


using the illustration from the text how many classes are there in terms of occupational, risk and what is the order of the greatest to the lease

Class 1 > class 5
class 5: high level of education/training.
class 4: white-collar office workers
Class 3: non-hazordous occupations, not working FT at a desk and may be outside
Class 2: skilled or semi-skilled light mannual work for establoish business in non-hazordous industries
Class 1: moderate to heavy physical work, usual hazards, skilled or unskilled workers with light duties in stable companies and industries.


Some companies may offer a better occupation class to client if certain favourable criterias are met. What are these criterias?

1. income level
2. years of experience
3. number of employees supervised.


The duties of the job are fundamental to the considerations in establishing the occupation. Therefore class detailed insight into these duties is needed. What type of information is required?

1. type of industry
2. are or department where the individual works
3. materials handled
4. process engaged in
5. amount of time travelling
6. number of people supervised.
7. percentage of time spent in each duty
8. machines, vehicles and tools used


define insurable income

Earned income that would cease duirng a period of disability.
- includes bonuses, OT and contributions to pension and profit-sharing plans


In a self-employed occupation is the Owner's drawings looked upon as earned income?

No, Drawings are an advance or loan to the oawner from a company based on anticipated future profits and are not always a reflection of actual net earnings, nor are dividents if the company is incorporated.


What are dividends?

the disbursement of the retained earnings of the company, composed of profits from the current and prior years, therefore are not considered earned income.


What are the options available to the underwriter in arriving to a decision where there is an increased morbidity risk for either a medical or non-medical reason

1. premium ratings-
2. change of policy type.
3. benefit adjustments
4. exclusions.


What is the "contra proferentum" principal?

In canada if there is question as to the meaning of a term contained within an insuran ce contract and it can have more than one meaning/is unclear then the ambiguity will be resolved in the favour of the insured.


What is a long-term care (LTC) insurance product?

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 acitvities of Daily Living, and/or presence of cognitive impairement.


What is a large difference beween LTC and other insurance products?

the higher average age of the insurerd at the time of U/W is 60 for LTC.
- target market are those approaching retirement


define a basic LTC policy.

1. guarenteed renewable
- some cases are time specific
2. IF a change were to occur on the policy then all policies issued within the same class, will need to be changes.
3. some companies offer limited pay options.


Same class is defined as what?

series, age, or region.


When are benefits on an LTC policy payable?

when the insured is confined in a LTC facility and receiving care based upon the loss of 2+ DALS/cognitive impairements


Define Facility Care

defined as health or personal care services required on a long-term basis in a long-term care dacility as dtermined by a physiciaon to be medically necessary.
- facility must be licensed as a convalescent hospital, skilled nusing facility, custodical carfe facility, retirement home, or home for the aged.


How are Home care benefits paid out?

when the insurerd is receiving home care based on the loss of two or more acitivities of daily living


What is the definition of home care?

as a program of servies provided in the insured's home by skilled caregivers,
- some contracts allow this to be family memeb ers.
- can be provided in own home, or private home, home for the aged, retirement home or place that provides residential care


How is the benefit payment structured, and what happens in the event of a claim?

on a daily, weekly or monthly fixed amount.
ITs paid out in 1/3 ways
1. indemnity method
2. expense incurred method
3. disability method