Disability Income Insurance

Question 1

The financial impact of total disability may be worse than the financial impact of death

Answer 1

True

Question 2

Disability income insurance is designed to provide an individual with a specified income benifit in the event of a disabling illness or accident

Answer 2

True

Question 3

What’s the most common type of disability income policy?

Answer 3

The guaranteed renewable policy, which typically adjusts the premium on an annual basis

Question 4

The benifit paid under a disability income policy are paid in the form of what?

Answer 4

Monthly payments

Question 5

A ceiling is put on the amount of income protection they will issue one applicant based on the insureds income at the time of purchase

Answer 5

True

Question 6

What are the two ways to determine the amount of benefit payable under the disability income policies?

Answer 6

Percent of earnings, and the flat amount

Question 7

What is percent earnings approach?

Answer 7

It determines the benefit amount by using a percentage of the insureds pre disability earnings and takes into account other sources of disability income

Question 8

What is the flat amount method?

Answer 8

The policy specifies a flat income benefit amount that will be paid if the insured becomes totally disabled

Question 9

In disability income insurance the definition of total disability often considers the insureds education training and experience

Answer 9

True

Question 10

What are the two definitions of total disability?

Answer 10

Any occupation or own occupation

Question 11

What’s any occupation?

Answer 11

Requires the insured to be unable to perform any occupation by which he is totally suited by his education training or experience (his degree in college)

Question 12

What’s own occupation?

Answer 12

The insured is unable to perform the insureds current occupation as a result of an accident or sickness

Question 13

Most long term disability policies that provide benefits under own occupation only supply them for how long?

Answer 13

Two years then they switch to any occupation

Question 14

What’s nonoccupational coverage?

Answer 14

Does not provide benefits for losses occurring as the result of insureds employment

Question 15

What’s presumptive disability?

Answer 15

It automatically qualifies the insured for total disability because of the severity of their condition that’s obvious. Like blindness, deafness, loss of speech, loss of limbs

Question 16

What’s partial disability?

Answer 16

The inability to work at the job full time due to a disability or that limits the person to do all the job asks

Question 17

Facts about Flat amount benefits?

Answer 17

Is a set amount stated Ina policy.

The amount is usually 50% of the full disability benefit

Question 18

Residual amount benefit?

Answer 18

Based on the proportion of income actually lost due to the partial disability, taking into account the fact that the insured is able to work and earn some income

Question 19

How do you find the amount of residual amount benifit?

Answer 19

By multiplying the percentage of lost income by the state monthly benefit for total disability

Question 20

Policies that use the accidental bodily injury provision (result provision) require that the result of the injury has to be what?

Answer 20

Unexpected or accidental

Question 21

Accidental bodily injury is what?

Answer 21

Far less restrictive that the accidental means provision

Question 22

What’s the elimination period?

Answer 22

The time immediately following the start of a disability when benefits are not payable. It serves as the deductible in a disability income policy. The longer the elimination period the lower the premium for comparable disability benefits. Also know as the waiting period

Question 23

What’s the benefit period?

Answer 23

The maximum length of time that disability income benefits will be paid to the disabled insured. The longer the period, the higher the cost of the policy.

Question 24

Benefits periods.. short term and long term benefits

Answer 24

Short term is 6months to 2 years, long term is anything more than two years.. 5, 10, 20

Question 25

Recurrent disability provision?

Answer 25

So when someone gets total disability then recovers then weeks go by and they undergo a recurrence of the same disability.. that’s where this kicks in

Question 26

Most policies provide for recurrent disabilities by specifying a period of time slurring which the recurrence of a disability is considered a continuation of the prior disability

Answer 26

The insurer will then pay benefits without a new elimination period

Question 27

Waiver premium rider?

Answer 27

It exempts the policyowner from paying the policy’s premiums during periods of total disability… these premiums are waived at the beginning at the date of disability

Question 28

Guaranteed insurability rider?

Answer 28

Gives the insured the right to periodically increase the amount of benefits payable under the policy without evidence of insurability

Question 29

Rehab benefit

Answer 29

Insurer will pay the approved sort of rehab program to help a disabled return to work