Chapter 13 Flashcards
What is included is earned income for tax purposes?
Commissions, bonus, salary
A partial disability policy pays up to ____% of the total DI benefit, for up to _____ months.
50%; 6
What are the common elimination period durations?
30, 60, 90, 180, and 365 days (selected by the owner)
T/F: An AD&D policy only provides coverage against accidental loss.
T
How can WC be obtained or provided by the employer?
Through a commercial insurer, the state compensation fund or self-insured
The loss is a limb on an AD&D policy is called the ___________.
Capital sum
A BOE policy provides benefits for an insureds ___________ expense.
Normal business
A DI policy will provide monthly income that does not exceed ____% to _____% of a persons gross income.
50; 60
WC provides coverage against __________ work related injuries.
Compensable
The rider that gives benefits until the disabled is eligible for SS benefits is called the ____________ Rider.
SS Supplement Benefit
T/F: Benefits from an individual DI policy are received taxable.
F; individual benefits are received tax free
What is the advantage when an disability is considered a recurrent disability?
No new elimination period exists, and the insured receives immediate benefits
Explain the principal sum
The death benefit provided on an AD&D policy
Death or dismemberment must occur on an AD&D policy within ____ days for benefits to be paid.
90
What is the period at the beginning of each new disability policy where benefits are not provided?
The elimination or waiting period
An _________ DI policy provides coverage for disabilities that occur both on and off the job.
Occupational
What DI rider increases the monthly income amount to offset inflation?
The Cost Of Living Rider
What policy is designed to pay the insured if she cannot work due to injury or illness?
A disability policy
Define partial disability.
The inability to perform some, but not all of you occupation reaponsibilities
A BOE policy is not designed to pay the disabled owner an _______ or ________.
Income; salary
T/F: A guaranteed insurability rider allows more coverage to be purchased at anytime without underwriting.
F; an insurer will limit the increase option to a specified age, such as 40 or 50.
List five benefits that may be provided by WC.
Unlimited medical benefits, survivor income, funeral expense coverage, disability income, and rehabilitation benefits
The exclusion from coverage of a particular illness or injury may be done using an _______ rider.
Impairment
What is the doctors statement verifying that a disability exists preventing an insured from working?
Proof of loss
What is the name of a disability that appears for a second time?
A recurrent disability
What is the ceiling for the disability benefit by WC?
66 2/3% of income
Premiums paid for individual DI policies are __________.
Not deductible
T/F: The shorter the elimination period, the more expensive the DI policy.
T
What type of income is protected by a DI policy?
Earned income
DI premiums are waived by the insurer once the insured is disabled for _____ months.
3
A DI policy with a 90-day elimination period would provide how many days of benefits for a disability lasting one year?
12 months minus 3 months (90days) equals approximately 9 months or 270 days.
What policy provides benefits to the employer in the event a significant employee dies or becomes disabled?
A key employee policy
Employer paid DI premiums are deductible for the ________.
Employer
T/F: AD&D stands for Automatic Dividend and Distribution
F; it stands for Accidental Death and Dismemberment
What is the length of short term DI policy benefits?
From 13 to 52 weeks
What is the definition of a permanent disability?
A disability expected to last a lifetime
What is the standard disability definition?
A persons inability to perform her normal duties or occupation
What is a presumptive disability?
A disability cause by loss of sight, speech, or hearing
The dismemberment benefit on an AD&D policy is equal to ___% of the death benefit.
50%
What are DI policy premiums based on?
The elimination period, length and amount of monthly benefit, occupation, hobbies, age, sex, etc.
WC is __________, employee sponsored coverage.
Mandatory
What DI rider allows the policyowner to purchase additional amounts of protection without qualifying medically?
The guaranteed insurability rider
Explain residual disability.
A type of partial disability benefit that pays based on a percentage of lost income
To be considered a recurrent disability, the same disability must again disable the insured within ___ months.
6
Benefits received from a group, employer paid DI policy are taxable to the _________.
Employee
What type of DI policy is designed to make funds available to purchase the business interest of a disabled partner?
A disability buy sell policy
T/F: a DI return of premium rider returns a portion of premiums paid to owners at a predetermined time.
T
Define the term accident.
An outside event, beyond the control of the individual, that damages tissue or bone
What is the name for DI benefits provided only for off the job disabilities?
No occupational disabilities
BOE premiums are _________ to the owner and benefits received are __________.
Tax-deductible; taxable
