Disability Income Insurance Flashcards

Disability Income Insurance Key Concepts

• Earned but unpaid benefits are paid to an estate if the insured dies after becoming disabled.
• Residual disability occurs when a person returns to work part-time and earns less than prior to their disability. Benefits are based on the proportion of income lost.
• The most important factor for determining Disability Income coverage amount is the applicant's monthly income.
• A Guaranteed Insurability Option rider allows policyholders to increase their coverage as their income grows without needing evidence of insurability.
• Benefits paid under a disability income policy depend primarily on the insured's income.
• A Guaranteed insurability rider permits insured individuals to buy more coverage at predetermined times without proving health status.
• The Elimination Period acts as a deductible, requiring a waiting period before benefits are initiated.
• A Residual Benefit clause permits continued benefits for individuals who return to work part-time after disability.
• Maximum claim payments after a 30-day elimination period can be calculated by deducting the elimination period from the duration of total disability.
• The Waiver of Premium provision allows temporary suspension of premium payments during disability periods.
• Disability policies commonly exclude claims arising from war-related incidents.
• Residual Disability benefits are available to insured individuals who cannot perform all their occupational duties.
• Individual Disability Income policies typically include an Elimination period for claims.
• A time deductible is another term for the elimination period in disability insurance.
• A Disability Income policy pays monthly benefits for injuries or illnesses that prevent work.
• Nonoccupational coverage provides benefits for disabilities not related to employment, in contrast to work-related injuries covered by Workers' Compensation.
• Benefits may be limited based on a prospective insured individual's gross income at the time of purchase.
• Applicants for Disability Income insurance are generally not required to disclose their spouse's occupation.
• A Guaranteed Insurability rider offers policyholders the ability to increase coverage without health evaluations.
• After the 30-day Elimination period, benefits start at the end of the period for disabilities sustained.
• Once partially disabled, an insured may receive less than the full benefit amount specified in their policy.
• The primary limitation for determining Disability Income benefits is the insured's income.
• After a 30-day Elimination period, total benefits can be quantified accurately based on disability duration.
• Under the Recurrent Disability provision, policies may cover subsequent disabilities from the same cause without a new elimination period.
• A recurrent disability refers to a new disability period for the same or related condition following an initial claim.
• Insurers will rescind coverage if a claimant is found to have committed fraud, such as arson.
• Non-occupational disability coverage specifically caters to individuals facing non-work related disabilities.
• After satisfying an elimination period, insured persons can receive payments corresponding to the period of disability.
• Disability Income policies are designed to provide financial support during periods of temporary inability to work due to illnesses or injuries.