Disability Income Insurance Flashcards
How are disability contracts defined?
Own occupation
Modified own occupation
Any occupation
What are benefit provisions?
Elimination period
Benefit period
Amount of monthly indemnity.
What are benefit arrangements?
arrangements of disability income policies consisting of the benefit for total disability and a benefit for waiver-of-premium.
Dr. Wattley is a dentist earning $400,000 treating patients. He also has a thriving business of creating and selling ceramic dental implants for his own patients and for other dental offices. Dr. Wattley suffers the loss of use of one arm for 36 months following an accident, after which he returns to work full-time in his practice. During the 36-month period, he is unable to treat patients directly but continues to sell ceramic implants to other practices on a part-time basis. He owns a disability income insurance policy with a benefit amount of $10,000 per month after an elimination period of 180 days. The policy has a modified own occupation definition of disability for 24 months with benefits payable to age 65.
What amount of disability insurance benefits will Dr. Wattley receive over his period of disability?
Dr. Wattley’s policy has a modified own occupation definition of disability for the first 24 months of receiving benefits. Thereafter, the policy has an any occupation definition. He will receive $10,000 per month for 24 months but does not meet the definition of disability thereafter.
