Disability Income and Related Insurance Quiz

Question 1

In disability income insurance, if an insured is considered disabled because they cannot perform any job they are suited for by prior education, training, or experience, the insured falls under which definition of total disabiity?

Answer 1

Any occupation

Question 2

Income replacement contracts agree

Answer 2

to replace the insured’s income up to a stated percentage if the insured suffers a loss due to a covered accident or sickness

Question 3

If a policy is rated-up, which of the following is true?

1. The premium decreases
2. The number of exclusions decreases
3. The premium increases
4. The number of benefits increases

Answer 3

The premium increases

Question 4

The rider that may be added to a Disability Income policy that allows for an increase in the benefit amount under certain conditions is called

Answer 4

Cost of Living (COLA)

Question 5

Any applicant is considered to be high-risk, but not so much that the insurer wants to deny coverage. Which of the following is NOT true?

1. The insurer will issue a conditional coverage
2. The insurer can increase the premium
3. The insurer can add exclusions to the policy
4. The insurer can rate-up the policy

Answer 5

The insurer will issue a conditional coverage

Question 6

Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?

Answer 6

Disability Buy-Sell

Question 7

Benefit periods for individual short-term disability will usually continue from

Answer 7

6 months to 2 years

Question 8

All of the following apply to short-term disability plans EXCEPT

1. Group plans can provide benefit periods of up to 52 weeks
2. Both group and individual plans are renewable
3. A benefit period of 26 weeks is most common for group plans
4. Individual plans can provide benefit periods up to 2 years

Answer 8

Both group and individual plans are renewable

Question 9

A 37-year-old owns a policy with a Guaranteed Insurability Rider. The policyowner would like to increase the benefit amount offered by the policy. What documentation will be rwquired?

Answer 9

No documentation

Question 10

Certain conditions, such as dismemberment ot total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe?

Answer 10

Presumptive disability

Question 11

What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before a loss can be covered?

Answer 11

Probationary period

Question 12

The period of tiime immediately following a disability during which benefits are not payable is

Answer 12

The elimination period

Question 13

All of the following are true about group disability income insurance EXCEPT

1. Coverage applied both on and off the job
2. the longer the waiting period, the lower the premium
3. The waiting period starts at the onset of the injury or sickness
4. Benefits are usually short term

Answer 13

Coverage applies both on and off the job

Question 14

When an insurer combines two periods of disability into one, the insured must have suffered a

Answer 14

Recurrent disability

Question 15

Which of the following disability income policies would have the highest premium?

1. 15-day waiting period / 10-yr benefit period
2. 30-day waiting period / 5-yr benefit period
3. 30-day waiting period / 10-yr benefit period
   4.15-day waiting period / 5-yr benefit period