Disability Insurance

Question 1

Own occupation policy

Answer 1

Will provide benefits when the insured is unable to perform any duties of their own occupation because of sickness or accident. It is usually limited to the first 24 months (2 years) after a loss.

Question 2

Any occupation policy

Answer 2

Will provide benefits when the insured is unable to perform any of the duties of the occupation for which they are suited by reason of education, training, or experience.

Question 3

Presumptive Disability

Answer 3

Is a provision that is found in most disability policies which specifies the conditions that will automatically qualify the insured for benefits. This policy requires a loss of at least two limbs, loss of hearing or speech or total and permanent blindness. Benefits are still paid even if the insured is able to work

Question 4

Elimination period

Answer 4

Is a waiting period. It is a deductible measured in days, instead of dollars. Designed to eliminate coverage for short-term disabilities -!: reduce the filing of excessive claims

Question 5

Occupational coverage

Answer 5

Provides benefits for illness, injury or disability resulting from accidents or sickness that occur ON or OFF the job.

Question 6

Non occupational coverage

Answer 6

Only covers claims that result from accidents or sicknesses occurring OFF the job.

Question 7

How long do Long-term disability plans offer benefits?

Answer 7

These group plans usually pay benefits for 2 years or longer

Question 8

Key person disability insurance

Answer 8

Is purchased by the employer on the life of a key employee. In the event the employee was injured or disabled this policy would help train the replacement. The contract is owned by the business and the beneficiary is the business.

Question 9

How is the amount of SS disability benefits calculated?

Answer 9

It is based on the workers PIA, which is calculated from their average indexed monthly earnings over their highest 35 years.

Question 10

Business overhead insurance

Answer 10

Is designed to pay for on-going day to day expenses of a small business owner while they’re disabled and unable to work, like salary of employees, and rent

Question 11

Individual disability income policies are taxable or not?

Answer 11

Individual disability income premiums are paid with after tax dollars and benefits are not income taxable.

Question 12

How long are short term disability group plans?

Answer 12

Usually they have a benefit period of less than 2 years. It is common to place a max dollar amount on the benefit that will be provided regardless of earnings

Question 13

How long is a long term benefit policy?

Answer 13

Group plans usually pay benefits for 2 years or longer.

Question 14

COLA- cost of living adjustment rider

Answer 14

Helps protect against inflation. Under this rider the insureds monthly benefit will be increased automatically once the claim has begun. Generally the first increase would be at the end of one year to be followed by annual increases for as long as the insured remains on the claim

Question 15

What does a buy-sell policy in a disability policy provide?

Answer 15

It provides funds, cash to accomplish a buyout of the company if the owner does or becomes disabled.

Question 16

What is the eligibility requirement for all social security disability income benefits?

Answer 16

That they have attained fully insured status.

Question 17

Why is there coordination of benefits in a group rider for social security benefits?

Answer 17

In order to avoid over insurance, the insurance companies have several options to with the SS benefits

Question 18

What are SIS(social insurance security) riders? And when are they used?

Answer 18

They are used to supplement or replace benefits that might be payable under SS disability. These provide for the payment of income benefits generally when

the insured is eligible for SS but before the benefits begin because of the waiting period.

If the insured has been denied coverage under SS

When the amount payable under SS is less than the amount payable under the rider.