Chapter 10: Accident and Sickness Definitions

Question 1

Two Definitions to define an “Accidental Injury”?

Answer 1

Accidental Means
Accidental Bodily Injury

Question 2

_____ ______- the reason for the accident must be unintentional and unexpected. In other words, the insured must be unaware that the risk would create a loss, and be unaware that the events leading up to the risk has the potential for loss.

Answer 2

Accidental Means

Question 3

TF: the accidental means definition is more restrictive than the accidental bodily injury definition. Therefore, the accidental means definition can be thought of as a “cause and effect” test.

Answer 3

True

Question 4

____ ______ _____ is any event that causes loss in which the results of the loss were unforeseen. Policies that use the accidental bodily injury definition cover nearly all injuries, except for those that were self-inflicted.

Answer 4

Accidental Bodily Injury

Question 5

A person decides to sit down in a chair, and notices that one of the legs on the chair is wobbly, but sits down anyway. Suddenly, the chair breaks and the person fall to the ground, breaking their tailbone. Which definition would refuse to pay benefits? WHich definition would pay benefits?

Answer 5

Accidental Means would NOT pay - a person should know sitting in a wobbly chair could cause an injury
Accidental Bodily Injury WOULD pay - the person did not mean to break their tailbone

Question 6

_______ is defined as an illness, sickness, or disease that appears after the policy’s effective date.

Answer 6

Sickness

Question 7

_____ _____ in a disability income policy state the length of the elimination period and benefit period, and the amount of each periodic benefit.

Answer 7

Benefit Provisions

Question 8

The ________ ________ occurs from the policy effective date and extends for a period of time, such as 15 or 30 days. The waiting period for accidents may be different than for sickness.

Answer 8

Probationary Period

Question 9

TF: During the probationary period, benefits are not payable for sickness, but usually are payable for accidents.

Answer 9

True

Question 10

The purpose of the probationary period is to prevent the insurer from _____ a _______ – when an individual purchases a disability income policy when already sick.

Answer 10

Buying a Claim

Question 11

The ______ _______ is a “time deductible,” specifying a period of time beginning immediately upon a disability when benefits are not payable.

Answer 11

Elimination Period

Question 12

TF: Elimination Period = Time Deductible

Answer 12

True

Question 13

Elimination periods range from ____ to ____ days or more. Policies with longer elimination periods have lower premiums because the insurer is paying benefits for a shorter period than if benefits had begun immediately.

Answer 13

30 to 180

Question 14

TF: The purpose of the elimination period is to prevent the insurer from paying long-term disabilities.

Answer 14

False - SHORT term disabilities

Question 15

TF: If an individual, who has already qualified for disability benefits and satisfied the elimination period, returns to work and suffers another disabling event that is unrelated to the first disability, he or she will have to satisfy a new elimination period in order to receive disability benefits for the second disability.

Answer 15

True

Question 16

The _____ ______ is a period of time disability income benefits will be paid to the insured after the elimination period is fulfilled.

Answer 16

Benefit Period

Question 17

TF: Benefit periods may be one year, two years, five years, or until the insured reaches the age of 65 (retirement age). Longer benefit periods require higher premium payments.

Answer 17

True

Question 18

The insurance company may not pay a disability benefit any less frequently than ______

Answer 18

Monthly

Question 19

The _____ ____ provision allows a stated period of time to lapse after an accident before the onset of a disability, after which period the insured is still eligible for benefits. This stated period may be 30, 60, or 90 days.

Answer 19

Delayed Disability

Question 20

______ ______ is a condition in a disability income policy that permits the insured to be automatically eligible for total disability income benefits, regardless of their ability to work.

Answer 20

Presumptive Disability

Question 21

Examples of _____ _______ include:

Loss of vision in both eyes,
Loss of use or dismemberment in any two limbs, or
Complete loss of hearing or speech.

Answer 21

Presumptive Disability

Question 22

_________ _________ is the inability of an individual:

To perform one or more work duties in their own occupation, or
To work full-time.

Answer 22

Partial Disability

Question 23

TF: A partial disability benefit covers loss of income resulting from a person’s inability to perform their work duties to the fullest.

Answer 23

tRUE

Question 24

TF” Partial disability benefits are usually half (50%) of the total disability benefits and are paid for up to six months.

Answer 24

True

Question 25

Flat vs Residual amounts for partial disability?

Answer 25

Flat = typically half (50% of total disability benefit)
Residual = percentage actually lost due to partial disability (can’t work 30% of the time, benefit payout is 30% of income)

Question 26

_______ ______ means that the insured has a total disability and returns to work, but can only perform some of the duties they could perform prior to the disability.

Answer 26

Residual Disability

Question 27

_____ _______ benefits pay the insured a disability income benefit equal to either:

The difference between their present earnings and their earnings prior to the disability, or
50% of the total disability benefit.

Answer 27

Residual Disability

Question 28

TF: The residual disability benefit differs from the partial disability benefit in that benefits for partial disability are paid for a longer period of time, in some cases until the insured reaches the age of 65.

Answer 28

False - Residual is longer (until 65)

Question 29

A ______ _______ provision is a time period specified in the policy during which the recurrence of a disabling condition is considered an extension of a prior disability. This provision prevents the insured from needing to fulfill another elimination period for a disability that has simply reappeared.

Answer 29

recurrent disability (usually 90 days to 6 months)

Question 30

The _____ ______ benefit pays medical expenses caused by an accidental injury that does not cause total disability. This benefit does not pay disability income benefits. The benefit is a one-time payment that is limited to a percentage of the disability income benefit, stated in the policy.

Answer 30

nondisabling injury

Question 31

An insured is never expected to recover from a _____ _____ causing the insured to be unable to work permanently. Examples of permanent disability include loss of limbs and total blindness.

Answer 31

Permanent Disability

Question 32

A _____ ____ prevents the insured from working during the recovery and rehabilitation process, but the insured is expected to recover completely. An example would be a heart attack or stroke.

Answer 32

temporary disability

Question 33

A ____ _____ restricts the insured indoors. A nonconfining disability does not restrict the insured to an indoor environment.

Answer 33

Confining disability

Question 34

TF: Confining = indoors only
Nonconfining = not restricted to indoors

Answer 34

True

Question 35

Disability income policies can provide either ____ or ______ coverage.

Answer 35

Occupational or Nonoccupational

Question 36

_________ policies pay disability income benefits regardless of whether the disability resulted from a work-related incident or not. _______ policies only pay benefits if the disability resulted outside of work or is not work-related and the insured is eligible for Workers’ Compensation benefits.

Answer 36

Occupational
Nonoccupational

Question 37

___-____ _____ is long-term disability coverage for disabilities that occur as a result of accident or sickness at any time of day, whether or not the insured is at work.

Answer 37

24-hour coverage

Question 38

TF: 24-hour coverage may be offered as nonoccupational coverage only because Workers’ Compensation specifically covers accident, sickness, and disability that occur while on the job. Workers’ Compensation provides limited at-work coverage only.

Answer 38

True

Question 39

All of the following would be paid under a presumptive disability benefit, EXCEPT:
Select one:
a. Loss of vision in both eyes
b. Total speech loss
c. Partial hearing loss
d. Loss of use of both hands

Answer 39

C

Question 40

What is the purpose of the elimination period in disability income policies?
Select one:
a. To prevent adverse selection
b. To prevent overinsurance
c. To prevent payment of short-term disabilities
d. To prevent payment of long-term disabilities

Answer 40

C

Question 41

All of the following are false regarding disability income policy benefit periods, EXCEPT:
Select one:
a. Shorter benefit periods offer higher policy benefits.
b. Premiums are not affected by the length of the benefit period.
c. Longer benefit periods have higher premiums.
d. Shorter benefit periods have higher premiums.

Answer 41

C

Question 42

All of the following are true statements regarding partial disability, EXCEPT:
Select one:
a. Partial disability benefits are only paid for sickness.
b. Income is reduced because the insured cannot work.
c. The insured cannot perform all of their occupational duties.
d. The insured cannot work full-time.

Answer 42

A

Question 43

Recurrent disability is:
Select one:
a. When the insured has a total disability, returns to work, but can only perform some of the duties they could perform prior to the disability
b. A condition in a disability income policy that permits the insured to be automatically eligible for total disability income benefits regardless of their ability to work
c. The inability of an individual to perform one or more work duties in their own occupation, or they cannot work full-time
d. A time period specified in the policy during which the recurrence of a disabling condition is considered an extension of a prior disability

Answer 43

D

Question 44

Residual disability is:
Select one:
a. When the insured has a total disability, returns to work, but can only perform some of the duties they could perform prior to the disability
b. A condition in a disability income policy that permits the insured to be automatically eligible for total disability income benefits regardless of their ability to work
c. The inability of an individual to perform one or more work duties in their own occupation, or they cannot work full-time
d. A time period specified in the policy during which the recurrence of a disabling condition is considered an extension of a prior disability

Answer 44

A

Question 45

How does an elimination period work in disability income policies?
Select one:
a. Once the policy is issued, the insured must undergo an elimination period, usually 30 to 90 days, before coverage begins.
b. For each disability, the insured must satisfy an elimination period.
c. The insured must satisfy the elimination period for the first disability claimed under the policy.
d. The insured must satisfy the elimination period for disabilities caused only by sickness.

Answer 45

B

Question 46

Maria is moving boxes into her new apartment and strains her back, causing a disability. Her disability income policy will not pay benefits because her injury was not unforeseen. Maria’s policy uses:
Select one:
a. The accidental means definition of injury
b. The accidental bodily injury definition of injury
c. The own occupation definition of disability
d. The any occupation definition of disability

Answer 46

A

Question 47

A disability policy containing which of the following provisions is the cheapest?

Select one:
a. Any occupation policy that has a 180-day elimination period
b. Own occupation policy that has a 90-day elimination period
c. Any occupation policy that has a 90-day elimination period
d. Own occupation policy that has a 180-day elimination period

Answer 47

A

Question 48

While at work, a heavy box falls on Emily’s foot breaking three of her toes. She is unable to work for one month. Two months later while working, she breaks her toes again. Which of the following definitions of disability applies to Emily’s situation?
Select one:
a. Presumptive disability
b. Partial disability
c. Residual disability
d. Recurrent disability

Answer 48

D