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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
Disability Benefit Amount is typically...
60-70% of gross income up to a monthly max
26
Gross Income
Before taxes and deductions
27
Earnings-to-Insurance Clause
Prevents receiving more than 100% even if multiple policies are purchased
28
Disability benefits must be paid at least...
Monthly
29
Cost of Living Rider
Increases benefits after a disability has already occurred
30
Cost of Living Rider can increase benefits annually based on...
Economic index or at a set percentage
31
For a cost of living rider, benefits can never be...
Higher than a cap included on the rider and never lower than their original amount
32
Future Purchase Option Rider
Can increase the benefit amount prior to a disability occurring
33
Future purchase option rider lets policyholder...
Buy more benefits regardless of health
34
Future Purchase Option Rider: Benefits bought later will be based on...
Attained age at the time
35
Future Purchase Option Rider: Option to buy more might be limited to certain...
90 day windows every few years up to a certain age or certain life events
36
Partial Disability might require...
Permanent disability first
37
Residual Disabilities
Can pay a certain percentage of the difference between pre-disability and post-disability income
38
Residual disabilities might not...
Require total disability first
39
Residual disability is used in most policies instead of...
Partial disability
40
Waiver of Premium
Allows insured to stop paying premium while disabled
41
Waiver of premium kicks in after a disability has lasted...
90 days or at the end of elimination period, whichever is less
42
Waiver of premium might be either...
In rider or built into the policy
43
Waiver of Premium: Premium might be required again if...
Disability ends
44
Return of Premium Rider
Allows for partial refund of premium after a certain point
45
Return of Premium Rider: Return might be reduced by...
Amount of benefits received
46
Disability Exclusions
Intentional injuries; Illegal activities; War disabilities; alcoholism and drug abuse
47
Pre-existing conditions are commonly...
Excluded from disability coverage
48
Pre-Existing Conditions
Conditions treated 6 months to 2 years prior to the policy
49
Pre-existing condition exclusions might be permanent for...
6 months to 2 years
50
Pre-existing condition exclusions might not be allowed in other...
Health insurance
51
Additional probationary period might exclude...
New illness for a few months after purchase
52
Pregnancy is considered...
Sickness
53
Pregnancy is not covered by...
Accident-only policies
54
Pregnancy can be viewed as...
Pre-existing condition
55
Maternity leave won't be covered unless...
Medically necessary
56
Business Overhead
Covers business' expenses while owner disabled
57
Business overhead benefits last no more than...
2 years
58
Business overhead benefit limits are based on...
Amount of actual expenses
59
Business overhead provides no coverage for...
Owner's income
60
Disability Buy-Sell Plan
Owners buy insurance on one another
61
Buy-Sell Plan provides...
Lump sum to buy out a disabled business owner
62
Buy-Sell plan typically requires...
Long-term disability
63
Key Person Disability
Compensates the business when an important employee is disabled
64
With key person disability, business is the owner but...
Requires employees consent
65
Benefits are generally taxable when...
Premiums are paid via an employer or payroll deductions with pre-tax dollars
66
Most group plans are...
Taxable
67
Benefits are generally not taxable when...
Bought with after tax dollars
68
Most individual plans are...
Not taxable
69
Businesses can deduct premiums for...
Group plans or business overhead policies
70
Businesses can't deduct premiums for...
Key-employee policies or buy/sell plans but can get tax-free benefits
71
Credit Disability Insurance is also known as...
Disability Reducing Term
72
Credit Disability Insurance
Pays money to a lender after a borrower is disabled
73
Credit Disability Insurance: Benefits often decrease as...
Loan is paid off
74
Credit Disability Insurance: Who owns the insurance
Lender
75
Worker's Compensation
Employees are covered for workplace injuries/illnesses
76
WC: No out-of-pocket expenses for...
Medical care
77
WC: Income benefits care equal...
2/3 of salary/wages
78
WC: Provides death benefits for...
Survivors and final expenses
79
WC: No coverage for...
Non-workplace disabilities and non-employees
80
Non-occupational disability policies won't pay for...
Any workplace injuries
81
Coordinating disability policies either won't...
Pay for workplace injuries or will at least reduce benefits to account for WC
82
WC: Group disability insurance
Either non-occupational or coordinating
83
WC: Non-Group Plans
Might not reduce for WC
84
WC: Major Medical
Excludes WC injuries
85
Social Security
Based on a person's insurance amount already paid in the form of payroll taxes
86
SS: Must be too disabled for...
Any employment
87
SS: Disability must be expected to last for...
1 year or more
88
SS: Elimination period for...
5 months
89
SS: Benefits last until...
Person can work or until retirement age, whichever is first
90
Social Security Supplement aka...
Additional Monthly Benefit Rider
91
Social Security Supplement
Can pay if person qualifies for certain government benefits
92
SSS benefits will be reduced or stop upon...
Qualifying for government benefits

IL Life and Health Insurance (29 decks)

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