Independ Disability Income

Question 1

Which statement is correct about residual benefit payments?

Benefits cannot continue for the maximum benefit period allowed for total disability.
The insured must lose at least 20 percent of pre-disability income before benefits begin.
Benefits usually end when the income loss is above 20 percent of pre-disability earnings.
Residual benefits are calculated annually.

Answer 1

The insured must lose at least 20 percent of pre-disability income before benefits begin.
Residual disability benefits usually end when an insured’s income loss is less than 20 percent of pre-disability earnings.

Question 2

An income replacement disability insurance policy pays a monthly benefit that equals:

Answer 2

the actual amount of income lost

Question 3

Which statement about credit disability insurance is correct? It pays a flat benefit amount over the policy period.
It covers the risk of being disabled and unable to loan money.
The policy repays the principal amount, but not any interest.
The benefit period is the same as the loan period.

Answer 3

The benefit period is the same as the loan period. A credit disability policy covers the risk of becoming disabled and being unable to pay off a loan.

Question 4

Which of the following statements about individual disability income policies is correct?

A flat benefit amount is rare in individual disability income policies.
Benefits never exceed the insured’s income.
Benefits equal the insured’s pre-disability income.
Benefits are not related to a flat amount or percentage of the insured’s earnings.

Answer 4

Benefits never exceed the insured’s income. The flat benefit is common in individual policies. Under this method, the policy specifies a flat income benefit amount that will be paid if the insured becomes totally disabled.