CH 10 Disability Income and Related Insurance Flashcards
What are the four types of workers compensation benefits?
- Medical
- Income
- Rehabilitation and
- Death benefits
What type of insurance covers an employee who is hurt on the job?
Workers compensation
What type of health insurance is sold to small business owners to reimburse them for the overhead expenses?
BOE - Business Overhead Expense insurance
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?
Premium will be refunded
How does someone qualify for Social Security disability income benefits?
- The insured must have the proper insured status (such as fully insured)
- Meet the definition of disability
- Satisfy the waiting period
What is the purpose of a buy sell agreement for health insurance policies?
To specify how the business will pass between owners when one of them dies or becomes disabled
What type of disabilities will be covered by occupational coverage?
Disabilities that result from accident or sicknesses that occur on or off the job
What is the own occupation disability?
Insureds inability to perform duties of his or her current job or an occupation for which the insured is educated and trained
What does the amount of disability benefits that an insured can receive depend on?
The insureds income at the time of policy application
What is the primary purpose of disability income insurance?
To replace income lost due to a disability
What portion, if any, of the individual disability income policy benefits or tax to the insured?
Disability benefits are not income taxable
With key person disability insurance, who pays the policy premiums?
The business (employer)
What is the term for a period of time immediately following a disability during which benefits are not payable?
Elimination period
What type of health insurance covers partners or corporate officers of a closely held business?
Disability buy sell
What is presumptive disability provision
Provision found in most disability income policies that specifies the conditions that will automatically qualify for full disability benefits
What entity regulates Worker’s Compensation benefits?
State government
How can an AD&D policy be written?
As a rider to a health insurance policy, or as a separate policy
A waiver of premium provision may be included with what type of health insurance policies
Disability income
What is another name for old age, survivors, and disability insurance benefits?
Social Security
What type of health insurance would pay for hiring a replacement for an important employee who becomes disabled?
Key person disability insurance
What benefit is based on a primary insurance amount (PIA)?
Social Security disability benefit
In which of the following health plans are benefit payments attributed to employer contributions taxable to the employee?
A) Group Disability Income
B) AD&D
C) Disability buy out
D) Medical expense
Group Disability Income
If an insured worker has earned 40 quarters of coverage, the workers status under Social Security Disability is
A) Permanently insured
B) Fully insured
C) Partially insured
D) Correctly insured
Fully insured.
Which of the following refers to “own occupation” disability?
A) Insured business owner is unable to perform the duties of any related business
B) Insured is unable to perform duties of the occupation for which he/she was educated and trained
C) Insured is unable to perform duties of any occupation
D) Insured business owner is unable to perform the duties of his/her own business
Insured is unable to perform duties of the occupation for which he/she was educated and trained.
When a group disability insurance policy is paid entirely by the employer, benefits paid to disabled employees are
A) Deductible income to the employee
B) Deductible business expense to the employer
C) Taxable income to the employer
D) Taxable income to the employee
Taxable income to the employee.
All of the following are true regarding key person disability income insurance EXCEPT
A) The employer receives the benefits if the key person is disabled
B) The employer pays the premiums
C) The employee is the insured
D) Premiums are tax deductible as a business expense
Premiums are tax deductible as a business expense.
On a disability income policy that contains the “own occupation” definition of total disability, the insured will be entitled to benefits if they cannot perform
A) Any job that they are suited for by prior training
B) Any job that they are suited for by prior experience
C) Their regular job
D) Any job that they are suited for by prior education
Their regular job.
Which of the following is NOT true regarding partial disability?
A) This is a form of insurance that covers part-time workers
B) The insured can still report to work and receive benefits
C) Benefit payments are typically 50% of the total disability benefit
D) An insured would qualify if he couldn’t perform some of his normal job duties
This is a form of insurance that covers part-time workers.
Which of the following factors does an insurer use the most to determine the extent of disability benefits that it will promise in a contract?
A) The insure’d moral history
B) The insured’s hobbies
C) The insured’s income
D) The insured’s marital status
The insured’s income.
Benefit periods for individual short-term disability policies will usually continue from
A) 6 months to 2 years
B) 2 years to age 65
C) 1 week to 4 weeks
D) 3 months to 3 years
6 months to 2 years.
An insured’s disability income policy includes an additional monthly benefit rider. For how many years can the insured expect to receive payment from the insurer before social security benefits begin?
A) 5
B) 3
C) 2
D) 1
1 year.
An insured was involved in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an “own occupation” disability plan?
A) 1 month
B) She would not receive any benefits
C) 3 years
D) 2 years
2 years.
Which of the following is considered a presumptive disability under a disability income policy?
A) Loss of hearing in one ear
B) Loss of one hand or one foot
C) Loss of two limbs
D) Loss of one eye
Loss of two limbs.
A business wants to make sure that if a key employee becomes disabled, the business will be protected from any resulting loss. Which kind of insurance will protect the business?
A) Business Loss
B) Business disability
C) Individual disability
D) Management loss
Business disability.
Which of the following is NOT a characteristic of a group long-term disability plan?
A) The benefit can be up to 66 and 2/3% of one’s monthly income
B) The benefit can be up to 50% of one’s yearly income
C) The elimination period is the same as in the short term plans benefit period
D) The benefit period may be to age 65
The benefit can be up to 50% of one’s yearly income.
Income replacement contracts agree
A) To replace the insured’s income up to a stated percentage if the insured suffers a loss due to a covered accident or sickness
B) To replace income if the head of the household is the primary insured, and he/she loses income due to a lay-off
C) To cover any accident on the job, but not accidents outside of his/her job
D) To replace the insured for his/her company, including hiring and training wages
To replace the insured’s income up to a stated percentage if the insured suffers a loss due to a covered accident or sickness.
Workers compensation insurance covers a worker’s medical expenses resulting from work related sickness or injuries and covers loss of income from
A) Plant or office closings
B) Temporary job layoffs
C) Work-related disabilities
D) Job termination
Work-related disabilities.
