Questions and Answers
Non-occupational disability coverage is designed for:
What does the estate of a disabled individual receive if they have a Disability Income policy that pays monthly benefits?
Earned, but unpaid benefits
Disability policies do NOT normally pay for disabilities arising from which of the following?
An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT:
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What does a Guaranteed Insurability rider provide a Disability Income policyowner?
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What limits the monthly benefit amount for a Disability Income policy?
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What provision pays reduced benefits if a person returns to work but cannot work at full capacity?
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What provision in a health insurance policy suspends premiums while the insured is disabled?
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A disability elimination period is best described as a?
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What benefits cover a second disability without a new waiting period if it occurs within a specified time?
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What type of rider allows a policyholder to purchase additional coverage without needing to provide evidence of insurability?
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What is the elimination period in an individual disability policy?
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What is the situation called when a person returns to work after total disability but cannot earn the same income?
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What kind of policy would cover loss of income if a person becomes ill while traveling overseas?
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Which is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?
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What is the likely classification of a second period of disability after returning to work and then becoming disabled again?
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If a Disability Income policyowner suffers another disability from the same cause within a specified time, what is it called?
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What type of policy does a teacher receiving monthly benefits after a car accident have?
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What can T expect if he becomes partially disabled under a Disability Income policy that pays $5000?
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What type of policy will pay a monthly benefit to a personal assistant unable to work due to injuries at home?
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What is the primary factor that determines the benefits paid under a Disability Income policy?
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What may an insurance company limit in the monthly benefit amount a prospective policyholder can obtain?
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Study Notes
Non-Occupational Disability Coverage
- Designed for employees suffering from non-work-related disabilities.
- Work-related disabilities are covered separately by Workers' Compensation.
Disability Income Policy Benefits
- If an insured individual dies after becoming disabled, their estate is owed earned but unpaid benefits.
- Monthly benefit examples include a payment of $2,000.
Policy Exclusions
- Disability policies typically exclude coverage for disabilities resulting from war.
Application Requirements
- Disability income insurance applicants need to provide detailed personal information, excluding their spouse's occupation.
Guaranteed Insurability Rider
- This rider allows policyholders to increase their coverage amount periodically without showing evidence of insurability.
Coverage Amount Limitations
- The amount of disability income coverage is primarily limited by the insured's income level.
Residual Disability Provision
- Provides reduced benefits for individuals returning to work but unable to earn their pre-disability income fully.
Waiver of Premium
- A provision that suspends premium payments while an insured individual is disabled.
Elimination Period
- Known as a time deductible, it is the waiting period before disability benefits are paid out.
Recurrent Disability Coverage
- A second disability occurring within a specific timeframe can be covered without a new waiting period.
Individual Disability Policy Elimination Period
- Refers to the time a disabled person must wait before beginning to receive benefits.
Return to Work Scenarios
- If an individual returns to work but cannot earn previous income levels, they experience residual disability.
Disability Income Coverage
- Provides financial support for loss of income due to disabilities, including those arising from travel-related illnesses.
Key Considerations for Coverage
- The most critical factor in determining the amount of Disability Income coverage needed is the applicant's monthly income.
Recurrent Disabilities
- Insurance companies usually treat a second period of disability, after a brief return to work, as a recurrent disability.
Disability Due to Same Cause
- Coverage may be extended for a second disability caused by the same issue within a five-month period under the Recurrent Disability provision.
Types of Policies
- Disabilities resulting from accidents, such as those incurred while teaching, are covered under Disability Income policies.
Partial Disability Benefits
- Insured individuals who become partially disabled can expect benefits less than their full policy amount.
Personal Injury and Disability Income
- Disabilities resulting from home injuries are eligible for benefits through Disability Income policies.
Determining Benefits
- The primary factor influencing benefit amounts paid under a disability income policy is the insured's wages.
Gross Income Impact
- An insurance company may determine the maximum monthly benefit based on the insured's gross income at the time of policy purchase.
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Description
Explore key concepts related to disability income insurance with these flashcards. Learn about non-occupational disability coverage and its implications for insured individuals. Test your understanding with scenario-based questions to reinforce your knowledge.
