Podcast
Questions and Answers
What is the main risk associated with disability from an insurance point of view?
What is the main risk associated with disability from an insurance point of view?
What is Jonas's tax liability for any benefits paid from his disability plan?
What is Jonas's tax liability for any benefits paid from his disability plan?
What kind of rider allows Bryce to purchase additional amounts of coverage without providing evidence of insurability?
What kind of rider allows Bryce to purchase additional amounts of coverage without providing evidence of insurability?
In what form do disability income policies typically pay benefits?
In what form do disability income policies typically pay benefits?
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An example of a presumptive disability would be?
An example of a presumptive disability would be?
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A disability elimination period is best described as?
A disability elimination period is best described as?
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What is the time period called during which benefits pay for 2 years starting from the date of the injury?
What is the time period called during which benefits pay for 2 years starting from the date of the injury?
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What is the primary factor that determines the benefits paid under a disability income policy?
What is the primary factor that determines the benefits paid under a disability income policy?
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Claims payable to a Disability Income insured, even when they can continue to work, are the result of a?
Claims payable to a Disability Income insured, even when they can continue to work, are the result of a?
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What does loss of income insurance provide?
What does loss of income insurance provide?
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What percentage of a participant's income are group long-term disability benefit amounts typically limited to?
What percentage of a participant's income are group long-term disability benefit amounts typically limited to?
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Which option would have the highest premium for Frank shopping for a disability income policy?
Which option would have the highest premium for Frank shopping for a disability income policy?
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Which of these would NOT be considered a presumptive disability?
Which of these would NOT be considered a presumptive disability?
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Which clause defines total disability as being unable to perform the major duties of the insured's regular occupation?
Which clause defines total disability as being unable to perform the major duties of the insured's regular occupation?
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Typically, Long-Term Disability benefits are coordinated with which benefit plan?
Typically, Long-Term Disability benefits are coordinated with which benefit plan?
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Which disability policy provision would address concerns about the value of the benefits decreasing over time?
Which disability policy provision would address concerns about the value of the benefits decreasing over time?
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What is the purpose of a Disability Income Benefit?
What is the purpose of a Disability Income Benefit?
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The waiver of premium does NOT include which provision?
The waiver of premium does NOT include which provision?
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What is the elimination period of an individual disability policy?
What is the elimination period of an individual disability policy?
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Chris, a bricklayer, collects a full disability income check every month. How does his policy define total disability?
Chris, a bricklayer, collects a full disability income check every month. How does his policy define total disability?
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Which type of disability would be less than total impairment and equal to permanent impairment?
Which type of disability would be less than total impairment and equal to permanent impairment?
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A rehabilitation benefit is intended to?
A rehabilitation benefit is intended to?
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The waiting period for a disability insurance policy?
The waiting period for a disability insurance policy?
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The factor used most often when underwriting a disability income policy is?
The factor used most often when underwriting a disability income policy is?
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A disability income policy can prevent an insured from earning a higher income than if he/she were working by utilizing?
A disability income policy can prevent an insured from earning a higher income than if he/she were working by utilizing?
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A policyowner suffers an injury that makes him eligible for benefits under which provision?
A policyowner suffers an injury that makes him eligible for benefits under which provision?
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When are Tyler's premiums waived if he becomes disabled?
When are Tyler's premiums waived if he becomes disabled?
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Which statement regarding Group Disability Income insurance is TRUE?
Which statement regarding Group Disability Income insurance is TRUE?
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What kind of rider guarantees Tom the right to increase his benefits without a medical exam?
What kind of rider guarantees Tom the right to increase his benefits without a medical exam?
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The monthly benefit for an individual disability income policy is typically limited to avoid?
The monthly benefit for an individual disability income policy is typically limited to avoid?
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Study Notes
Disability Income Insurance Key Concepts
- Main Risk: Loss of income is the primary risk associated with disability insurance.
- Tax Implications: For employer-provided disability benefits, taxes are owed on 75% of the benefits received.
- Guaranteed Insurability Rider: Allows policyholders to purchase additional coverage without proving insurability at specified times.
- Benefit Payment Structure: Disability income policies typically provide benefits in the form of periodic income, not lump sums.
- Presumptive Disability Example: Conditions like deafness automatically qualify for full disability benefits due to their severity.
- Elimination Period: Described as a time deductible, marking the duration before benefits begin post-injury.
- Benefit Period: Refers to the duration, typically limited to two years, that benefits are paid following total disability from an injury.
- Key Determinant for Benefits: Benefits are primarily based on the insured's wages.
- Presumptive Disability Definition: Specific serious conditions qualify for full benefits without considering the insured's capacity to work.
- Loss of Income Insurance Function: Serves to replace wages for individuals who become disabled and cannot work.
- Group Long-Term Disability Limit: Typically capped at 60% of a participant's income.
- Premiums and Waiting Periods: Shorter waiting periods and longer benefit durations generally lead to higher premiums.
- Not Presumptive Disability: Loss of a leg and arm together is not classified as presumptive disability.
- Own Occupation Clause: Defines total disability based on the inability to perform the major duties of the insured's specific occupation.
- Coordination with Benefits: Long-term disability benefits are coordinated primarily with Social Security benefits.
- Cost of Living Benefit Provision: Addresses concerns about the diminishing value of benefits over time due to inflation.
- Disability Income Benefit Purpose: Designed to provide funds for living expenses during a period of disability.
- Waiver of Premium Limits: Does not generally cover premiums should the insured recover from the disability.
- Definition of Elimination Period: Timeframe a disabled individual must wait before benefits are activated.
- Total Disability Definition: Chris's policy defines total disability by the specific inability to perform his regular job duties, showcasing the "own occupation" approach.
- Partial Disability Concepts: Permanent partial disability aligns with injuries that result in less than total impairment but still impact earning capacity.
- Rehabilitation Benefit: Aimed at assisting the insured in preparing to return to work after a disability.
- Waiting Period Rule: Excludes short-term illnesses or injuries from being covered during this initial phase.
- Key Underwriting Factor: Annual earnings are the most significant variable assessed during the underwriting process for a disability income policy.
- Benefit Limits: Can restrict an insured's capacity to earn higher income following a disability.
- Eligibility for Partial Disability Benefits: Income loss due to an injury that limits job duties can lead to benefits under partial disability terms.
- Waiver of Premium Activation: Premiums begin to be waived from the date of the insured's disability, not from the date of policy issue or claim.
- Group Disability Income Insurance: Generally provides benefits for nonoccupational injuries and illnesses, a crucial distinction from individual policies.
- Riders for Guaranteed Insurability: Allow increased benefits without medical testing, enhancing policy flexibility.
- Overinsurance Prevention: Monthly benefits limitations help avoid situations where an insured could earn more through benefits than working.
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Description
Test your knowledge on disability income insurance with this quiz. You'll encounter questions about the risks associated with disability, as well as the tax implications of benefits received. Perfect for students and professionals in the insurance field.
