DISABILITY INCOME INSURANCE Flashcards
To be considered a recurrent disability, the same disability must again disable the insured within ___ months.
6 months
what policy provides benefits to the employer in the event a significant employee dies or becomes disabled?
a key employee policy
what are DI policy premiums based on?
the elimination period, length and amount of monthly benefit, occupation, hobbies, age, sex etc
what is a presumptive disability?
a disability caused by a loss of sight, speech, or hearing
what policy is designed to pay the injured if she cannot work due to injury or illness?
a disability policy
how can worker’s compensation be obtained or provided by the employer?
through a commercial insurer, the state compensation fund, or self-insured
what is the ceiling for the disability benefit provided by worker’s compensation?
66 2/3% of income
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 (90 days) equals approx 9 months or 270 days
worker’s comp is ____ employer sponsored coverage
is mandatory
what is included in earned income for tax purposes?
commissions, bonus and salary
benefits received from a group, employer paid DI policy are taxable to the ___
employee
T or F: benefits from an individual DI policy are received taxable
False - individual benefits are received tax free
list 5 benefits that may be provided by worker’s comp
unlimited medical benefits, survivor income, funeral expense coverage, disability income, and rehab benefits
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
what is the definition of a permanent disability?
a disability expected to last a lifetime
what are the common elimination periods durations?
30, 60, 90, 180 and 365 days (selected by the owner)
the rider that gives benefits until the disabled is eligible for SS benefits is called the ____ rider
SS supplement benefit
The loss of a limb on an AD&D policy is called the ____
capital sum
what is the length of short-term DI policy benefits?
from 13 to 52 weeks
T or F: an AD&D policy only provides coverage against accidental loss
true
what DI rider increases the monthly income amount to offset inflation?
(COLA) the cost of living rider
A business overhead expense policy provides benefits for an insured’s ___ expenses
business expenses
explain residual disability
a type of partial disability benefit that pays based on a percentage of lost income
define the term accident
is an outside event, beyond
what type of income is protected by a DI policy?
earned income
the dismemberment benefit on an AD&D policy is equal to ____ % of the death benefit
50%
an ____ DI policy provides coverage for disabilities that occur both on and off the job
occupational DI
a partial disability policy pays up to ___ % of the total DI benefit, for up to ___ months
50% up to 6 months
death or dismemberment must occur on an AD&D policy within ____ days for benefits to be paid
90 days
what is the doctor’s statement verifying that a disability exists preventing an insured from working?
proof of loss
what is the name for a disability that appears for a second time?
a recurrent disability
what policy is designed to pay the insured if she cannot work due to injury or illness?
a disability policy
T or F: a guaranteed insurability rider allows more coverage to be purchased at anytime without underwriting.
False. an insurer will limit the increase option to a specified age, such as 40 or 50
what does AD&D stand for
accidental death and dismemberment
a BOE policy is not designed to pay the disabled owner an ___ or ____
income or salary
define partial disability
inability to perform some, but not all of your occupation responsibilities
the rider that gives benefits until the disabled is eligible for SS benefits is called the
SS supplement benefit rider
what is the advantage when a disability is considered a recurrent disability?
no new elimination period exists, and the insured receives immediate beneifts
employer-paid DI premiums are deductible for the ____
employer
premiums paid for individual DI policies are _____
not deductible
explain the principal sum
the death benefit provided on an AD&D policy
what is the standard disability definition
a person’s inability to perform her normal duties or occupation
DI premiums are waived by the insurer once the insured is disabled for ____ months
DI premiums are waived by the insurer once the insured is disabled for 3 months
BOE premiums are ____ to the owner and benefits received are ____
tax deductible to the owner and benefits received are taxable
T or F: the shorter the elimination period, the more expensive the DI policy
true
the exclusion from coverage of a particular illness or injury may be done using an ____ rider
impairment
what DI rider allows the policy owner to purchase additional amounts of protection without qualifying medically?
the guaranteed insurability rider
worker’s compensation provides coverage against ____ work related injuries
compensable
