DISABILITY INCOME INSURANCE

Question 1

To be considered a recurrent disability, the same disability must again disable the insured within ___ months.

Answer 1

6 months

Question 2

what policy provides benefits to the employer in the event a significant employee dies or becomes disabled?

Answer 2

a key employee policy

Question 3

what are DI policy premiums based on?

Answer 3

the elimination period, length and amount of monthly benefit, occupation, hobbies, age, sex etc

Question 4

what is a presumptive disability?

Answer 4

a disability caused by a loss of sight, speech, or hearing

Question 5

what policy is designed to pay the injured if she cannot work due to injury or illness?

Answer 5

a disability policy

Question 6

how can worker’s compensation be obtained or provided by the employer?

Answer 6

through a commercial insurer, the state compensation fund, or self-insured

Question 7

what is the ceiling for the disability benefit provided by worker’s compensation?

Answer 7

66 2/3% of income

Question 8

a DI policy with a 90-day elimination period would provide how many days of benefits for a disability lasting one year?

Answer 8

12 months minus 3 months (90 days) equals approx 9 months or 270 days

Question 9

worker’s comp is ____ employer sponsored coverage

Answer 9

is mandatory

Question 10

what is included in earned income for tax purposes?

Answer 10

commissions, bonus and salary

Question 11

benefits received from a group, employer paid DI policy are taxable to the ___

Answer 11

employee

Question 12

T or F: benefits from an individual DI policy are received taxable

Answer 12

False - individual benefits are received tax free

Question 13

list 5 benefits that may be provided by worker’s comp

Answer 13

unlimited medical benefits, survivor income, funeral expense coverage, disability income, and rehab benefits

Question 14

what type of DI policy is designed to make funds available to purchase the business interest of a disabled partner?

Answer 14

a disability buy / sell policy

Question 15

what is the definition of a permanent disability?

Answer 15

a disability expected to last a lifetime

Question 16

what are the common elimination periods durations?

Answer 16

30, 60, 90, 180 and 365 days (selected by the owner)

Question 17

the rider that gives benefits until the disabled is eligible for SS benefits is called the ____ rider

Answer 17

SS supplement benefit

Question 18

The loss of a limb on an AD&D policy is called the ____

Answer 18

capital sum

Question 19

what is the length of short-term DI policy benefits?

Answer 19

from 13 to 52 weeks

Question 20

T or F: an AD&D policy only provides coverage against accidental loss

Answer 20

true

Question 21

what DI rider increases the monthly income amount to offset inflation?

Answer 21

(COLA) the cost of living rider

Question 22

A business overhead expense policy provides benefits for an insured’s ___ expenses

Answer 22

business expenses

Question 23

explain residual disability

Answer 23

a type of partial disability benefit that pays based on a percentage of lost income

Question 24

define the term accident

Answer 24

is an outside event, beyond

Question 25

what type of income is protected by a DI policy?

Answer 25

earned income

Question 26

the dismemberment benefit on an AD&D policy is equal to ____ % of the death benefit

Answer 26

50%

Question 27

an ____ DI policy provides coverage for disabilities that occur both on and off the job

Answer 27

occupational DI

Question 28

a partial disability policy pays up to ___ % of the total DI benefit, for up to ___ months

Answer 28

50% up to 6 months

Question 29

death or dismemberment must occur on an AD&D policy within ____ days for benefits to be paid

Answer 29

90 days

Question 30

what is the doctor’s statement verifying that a disability exists preventing an insured from working?

Answer 30

proof of loss

Question 31

what is the name for a disability that appears for a second time?

Answer 31

a recurrent disability

Question 32

what policy is designed to pay the insured if she cannot work due to injury or illness?

Answer 32

a disability policy

Question 33

T or F: a guaranteed insurability rider allows more coverage to be purchased at anytime without underwriting.

Answer 33

False. an insurer will limit the increase option to a specified age, such as 40 or 50

Question 34

what does AD&D stand for

Answer 34

accidental death and dismemberment

Question 35

a BOE policy is not designed to pay the disabled owner an ___ or ____

Answer 35

income or salary

Question 36

define partial disability

Answer 36

inability to perform some, but not all of your occupation responsibilities

Question 37

the rider that gives benefits until the disabled is eligible for SS benefits is called the

Answer 37

SS supplement benefit rider

Question 38

what is the advantage when a disability is considered a recurrent disability?

Answer 38

no new elimination period exists, and the insured receives immediate beneifts

Question 39

employer-paid DI premiums are deductible for the ____

Answer 39

employer

Question 40

premiums paid for individual DI policies are _____

Answer 40

not deductible

Question 41

explain the principal sum

Answer 41

the death benefit provided on an AD&D policy

Question 42

what is the standard disability definition

Answer 42

a person’s inability to perform her normal duties or occupation

Question 43

DI premiums are waived by the insurer once the insured is disabled for ____ months

Answer 43

DI premiums are waived by the insurer once the insured is disabled for 3 months

Question 44

BOE premiums are ____ to the owner and benefits received are ____

Answer 44

tax deductible to the owner and benefits received are taxable

Question 45

T or F: the shorter the elimination period, the more expensive the DI policy

Answer 45

true

Question 46

the exclusion from coverage of a particular illness or injury may be done using an ____ rider

Answer 46

impairment

Question 47

what DI rider allows the policy owner to purchase additional amounts of protection without qualifying medically?

Answer 47

the guaranteed insurability rider

Question 48

worker’s compensation provides coverage against ____ work related injuries

Answer 48

compensable