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IL Life and Health Insurance > Disability Insurance > Flashcards

Disability Insurance Flashcards

1
Q

Disability Insurance replaces portion of income when…

A

A person is too hurt or sick to work

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2
Q

Disability Insurance does not need to be a…

A

Workplace injury

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3
Q

Injury or illness must occur or begin during…

A

Policy period

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4
Q

Accident-Only Policy

A

Does not pay after illness

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5
Q

Loss of Income

A

Loss of ability must result in loss of income, often at least 20%

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6
Q

Disability must be certified by…

A

Qualified physician

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7
Q

Disability usually requires…

A

periodic re-certification

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8
Q

Own Occupation

A

Judges level of disability on your inability to do your exact job at time of disability

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9
Q

Any Occupation

A

Judges level of disability on inability to do any suitable job based on education, experience, etc

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10
Q

Own Occupation can change to Any Occupation after…

A

2-5 years

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11
Q

Short Term Disability

A

Lasts for a few months and no more than 2 years

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12
Q

Long Term Disability

A

Lasts years or until retirement age

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13
Q

Benefit Period

A

Duration of benefits

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14
Q

Elimination Period

A

Time-based deductible during which disabled person receives no benefits

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15
Q

Elimination Period begins at…

A

Time of disability, not at start of policy

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16
Q

Elimination Period: Short Term

A

0 days for injuries; 7 days for illnesses

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17
Q

Elimination Period: Long Term

A

30-90 days regardless of cause

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18
Q

Recurrent Disability

A

If disability re-occurs within 6 months of recovery, treated as same benefit period

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19
Q

Do recurrent disabilities require a new elimination period?

A

No

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20
Q

For recurrent disabilities, is the benefit period reset?

A

No

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21
Q

Presumptive Eligibility

A

Full benefits may be possible even if the person can work

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22
Q

Does presumptive eligibility have an elimination period?

A

No

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23
Q

Qualifiers for Presumptive Eligibility

A

Total blindness, total hearing loss, loss of 2 limbs

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24
Q

Disability Benefit Amount

A

Often based on person’s monthly income during 12 months prior to disability

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25
Q

Disability Benefit Amount is typically…

A

60-70% of gross income up to a monthly max

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26
Q

Gross Income

A

Before taxes and deductions

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27
Q

Earnings-to-Insurance Clause

A

Prevents receiving more than 100% even if multiple policies are purchased

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28
Q

Disability benefits must be paid at least…

A

Monthly

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29
Q

Cost of Living Rider

A

Increases benefits after a disability has already occurred

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30
Q

Cost of Living Rider can increase benefits annually based on…

A

Economic index or at a set percentage

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31
Q

For a cost of living rider, benefits can never be…

A

Higher than a cap included on the rider and never lower than their original amount

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32
Q

Future Purchase Option Rider

A

Can increase the benefit amount prior to a disability occurring

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33
Q

Future purchase option rider lets policyholder…

A

Buy more benefits regardless of health

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34
Q

Future Purchase Option Rider: Benefits bought later will be based on…

A

Attained age at the time

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35
Q

Future Purchase Option Rider: Option to buy more might be limited to certain…

A

90 day windows every few years up to a certain age or certain life events

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36
Q

Partial Disability might require…

A

Permanent disability first

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37
Q

Residual Disabilities

A

Can pay a certain percentage of the difference between pre-disability and post-disability income

38
Q

Residual disabilities might not…

A

Require total disability first

39
Q

Residual disability is used in most policies instead of…

A

Partial disability

40
Q

Waiver of Premium

A

Allows insured to stop paying premium while disabled

41
Q

Waiver of premium kicks in after a disability has lasted…

A

90 days or at the end of elimination period, whichever is less

42
Q

Waiver of premium might be either…

A

In rider or built into the policy

43
Q

Waiver of Premium: Premium might be required again if…

A

Disability ends

44
Q

Return of Premium Rider

A

Allows for partial refund of premium after a certain point

45
Q

Return of Premium Rider: Return might be reduced by…

A

Amount of benefits received

46
Q

Disability Exclusions

A

Intentional injuries; Illegal activities; War disabilities; alcoholism and drug abuse

47
Q

Pre-existing conditions are commonly…

A

Excluded from disability coverage

48
Q

Pre-Existing Conditions

A

Conditions treated 6 months to 2 years prior to the policy

49
Q

Pre-existing condition exclusions might be permanent for…

A

6 months to 2 years

50
Q

Pre-existing condition exclusions might not be allowed in other…

A

Health insurance

51
Q

Additional probationary period might exclude…

A

New illness for a few months after purchase

52
Q

Pregnancy is considered…

53
Q

Pregnancy is not covered by…

A

Accident-only policies

54
Q

Pregnancy can be viewed as…

A

Pre-existing condition

55
Q

Maternity leave won’t be covered unless…

A

Medically necessary

56
Q

Business Overhead

A

Covers business’ expenses while owner disabled

57
Q

Business overhead benefits last no more than…

58
Q

Business overhead benefit limits are based on…

A

Amount of actual expenses

59
Q

Business overhead provides no coverage for…

A

Owner’s income

60
Q

Disability Buy-Sell Plan

A

Owners buy insurance on one another

61
Q

Buy-Sell Plan provides…

A

Lump sum to buy out a disabled business owner

62
Q

Buy-Sell plan typically requires…

A

Long-term disability

63
Q

Key Person Disability

A

Compensates the business when an important employee is disabled

64
Q

With key person disability, business is the owner but…

A

Requires employees consent

65
Q

Benefits are generally taxable when…

A

Premiums are paid via an employer or payroll deductions with pre-tax dollars

66
Q

Most group plans are…

67
Q

Benefits are generally not taxable when…

A

Bought with after tax dollars

68
Q

Most individual plans are…

A

Not taxable

69
Q

Businesses can deduct premiums for…

A

Group plans or business overhead policies

70
Q

Businesses can’t deduct premiums for…

A

Key-employee policies or buy/sell plans but can get tax-free benefits

71
Q

Credit Disability Insurance is also known as…

A

Disability Reducing Term

72
Q

Credit Disability Insurance

A

Pays money to a lender after a borrower is disabled

73
Q

Credit Disability Insurance: Benefits often decrease as…

A

Loan is paid off

74
Q

Credit Disability Insurance: Who owns the insurance

75
Q

Worker’s Compensation

A

Employees are covered for workplace injuries/illnesses

76
Q

WC: No out-of-pocket expenses for…

A

Medical care

77
Q

WC: Income benefits care equal…

A

2/3 of salary/wages

78
Q

WC: Provides death benefits for…

A

Survivors and final expenses

79
Q

WC: No coverage for…

A

Non-workplace disabilities and non-employees

80
Q

Non-occupational disability policies won’t pay for…

A

Any workplace injuries

81
Q

Coordinating disability policies either won’t…

A

Pay for workplace injuries or will at least reduce benefits to account for WC

82
Q

WC: Group disability insurance

A

Either non-occupational or coordinating

83
Q

WC: Non-Group Plans

A

Might not reduce for WC

84
Q

WC: Major Medical

A

Excludes WC injuries

85
Q

Social Security

A

Based on a person’s insurance amount already paid in the form of payroll taxes

86
Q

SS: Must be too disabled for…

A

Any employment

87
Q

SS: Disability must be expected to last for…

A

1 year or more

88
Q

SS: Elimination period for…

89
Q

SS: Benefits last until…

A

Person can work or until retirement age, whichever is first

90
Q

Social Security Supplement aka…

A

Additional Monthly Benefit Rider

91
Q

Social Security Supplement

A

Can pay if person qualifies for certain government benefits

92
Q

SSS benefits will be reduced or stop upon…

A

Qualifying for government benefits

IL Life and Health Insurance (29 decks)

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