Disability Insurance (Chapter 6)

Question 1

This type of insurance acts as a hedge against being unable to work

Answer 1

Disability Insurance

Question 2

Less that what percent of SS Disability claims are approved?

Answer 2

25%

Question 3

Designed to provide benefits to workers who are injured while working (at work).

Answer 3

Workers Compensation

Question 4

What is the rule of thumb in terms of percentage of gross income that individuals should have protected with a disability insurance policy?

Answer 4

60-70% of gross income

Question 5

Defined as being unable to perform the duties of any occupation for which the insured is qualified based on education, training, and experience. Least expensive.

Answer 5

Any Occupation (definition of disability)

Question 6

Defined as being unable to perform each and every duty associated with his or her own occupation. Most expensive.

Answer 6

Own Occupation (definition of disability)

Question 7

Defined as own occupation for a period of time (generally two years) followed by an any occupation definition (often found in group policies.)

Answer 7

Split Definition (definition of disability)

Question 8

Presumptive Total Disability automatically considers the following conditions to be totally disabling:

Answer 8

Loss of sight in both eyes
Loss of hearing in both ears
Loss of use of both hands
Loss of use of both feet
Loss of use of one foot and one hand

Question 9

Defined as an inability to perform at least one important duty of the insureds normal occupation

Answer 9

Partial Disability

Question 10

Will provide continuing benefits for an insured who returns to work but suffers a loss of income due to disability.

Answer 10

Residual Benefit Provision

Question 11

If within 6 months of the disability the insured sustains a subsequent period from the same cause it will be deemed a continuation of the first one. (Otherwise deemed new disability regardless of cause).

Answer 11

Recurrent Disability Clause

Question 12

After two years the issuing company cannot claim that the insured misrepresented some aspect of the application - the claim must be paid after 2 years.

Answer 12

Incontestability Clause

Question 13

What is the difference between a guaranteed renewable and a non-cancellable policy?

Answer 13

Guaranteed Renewable policies permit increases in premium on a class basis. Non-cancellable policies have a higher premium

Question 14

What are the 4 major classes of medical insurance?

Answer 14

1) Hospital
2) Surgical
3) Physician
4) Major Medical