Chapter 6: Vocab

Question 1

any occupation

Answer 1

type of disability insurance policy that provides benefits to a policy owner if he or she is unable to perform the duties of any occupation for which he or she is suited by education, training, or experience

Question 2

automatic increase rider

Answer 2

a provision that automatically increases the monthly benefit by a stated percentage each year

Question 3

COLA Rider

Answer 3

provides a cost of living adjustment to benefits payments based on increases in inflation

Question 4

Disability insurance

Answer 4

type of insurance that provides supplementary income in the event of an illness or accident resulting in a disability that prevents the insured from working at his or her regular employment

Question 5

elimination period

Answer 5

period of time, beginning upon injury or sickness, that an insured is disabled but is not collecting benefits from the insurer

Question 6

future increase option rider

Answer 6

a provision that permits the insured to increase benefit coverage as they get older

Question 7

guaranteed renewable

Answer 7

a provision that requires the insurance company to renew the policy for a specified period of time or until the insured attains a certain age

Question 8

long term disability

Answer 8

provides coverage for a specified term, until specified age, or until death

Question 9

non-cancelable

Answer 9

a provision that prevents the insurance company from canceling the policy for any reason provided the policy premium is paid

Question 10

own occupation

Answer 10

type of disability insurance policy that provides benefits to a policyholder if he is unable to perform the duties of their occupation. This type of policy is more expensive than an any occupation policy

Question 11

partial disability

Answer 11

a provision that provides payments that are less than those paid for a total disability

Question 12

presumptive total disability coverage

Answer 12

a provision that will provide continuing benefits for an insured who returns to work but suffers a reduction of income due to a disability

Question 13

residual benefits provision

Answer 13

provides continuing benefits for an insured who returns to work but suffers a reduction of income due to a disability

Question 14

short term disability

Answer 14

provides coverage for up to two years, and typically has a five to 30 day elimination period (the period an insured must wait before receiving benefits)

Question 15

social security disability benefits

Answer 15

available to anyone insured under the system who meets the strict definition of disability

Question 16

split definition

Answer 16

type of disability policy where an insured is covered against the risk of not performing his or her own occupation for a period of time, and after that period expires, an any occupation definition of disability is used

Question 17

worker’s compensation

Answer 17

designed to provide benefits to workers who are injured while working