Chapter 04 Flashcards
Elimination Period (Waiting Period)
Time deductible
Partial Disability
50%
Residual Disability
Not ready to return to work after all
Residual Disability
Not ready to return to work after all
At work benefits
Recurrent Disability
At work benefits
e single most important rating factor of disability income underwriting
occupation
What happens if you make a claim and failed to disclose a change in occupation
Reduces benefit that would have been appropriate for the occupational hazard change in proportian to the pemium you paid
Get what you paid for
Common Exclusions
■ 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
Underwriting Group Disability Plans
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
The Age Discrimination in Employment Act (ADEA)
Cannot pay a higher rate than younger folk
Short-Term Disability (STD)
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.
Long-Term Disability (LTD)
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.
Business Overhead Expense
owner cannot collect for loss of income under this policy, only cover biz expenses
Cost Of Living Rider
protects the insured against inflation
Guaranteed Purchase Option (Guaranteed Insurability, Future Increase) Rider
Can purchase more insurance after key date (age) or event (kid, marriage)
Waiver Of Premium Rider
Waive premiums after elimination period
Impairment Rider
Eliminates coverage for pre-existing conditions,
rider may make insurance obtainable for an otherwise uninsurable person.
Return of Premium Rider
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
What is required for Workers Comp
bodily injury and or occupational diseases that arise
from and in the course of employment.
Workers Comp: Medical Benefits
Unlimited as to time, but dollar amounts payable may be limited by law
Workers Comp: Scheduled Injury
This for that; set benefit for set permanent partial injuries
Social Security Disability Insurance: What is fully insured
(40 quarters or credits), 10 years of entire work history
Workers Comp: Total Disability
The benefit amount is subject to maximum and minimum weekly limits
Workers Comp: Partial Disability
–Benefits restore a percentage of lost wages.
Social Security Disability Insurance: Definition of Disability
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.
Social Security Disability Insurance: What is the waiting period
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).
Disability Income Benefits
Based on the employee’s average indexed monthly earnings on
which Social Security taxes have been paid.
<b>This is referred to as the Primary Insurance Amount
(PIA).</b>
What is the Total Amount Family can get in PIA
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.
What is the Coordination of Benefits (CoB)
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.
