Insurance MCQ

When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following? Answer: Residual disability

Z owns a Disability Income policy with a 30-day Elimination period. Z contracts pneumonia that leaves him unable to work from January 1 until January 15. Z then becomes disabled from an accident on February 1 and the disability lasts until July 1 the same year. Z will become eligible to receive benefits starting on Answer: March 1

V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefit are payable? Answer: 4 months

A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow? Answer: Guaranteed Insurability Option rider

J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this? Answer: Nonoccupational coverage

D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits? Answer: Residual Benefit clause

Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this? Answer: Guaranteed insurability rider

P received Disability income benefits for 3 months then returns to work. She is able to work one month before her condition returns, leaving her disabled once again. What would the insurance company most likely regard this second period of disability as? Answer: A recurrent disability

When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits? Answer: A recurrent disability

When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is Answer: income

M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate? Answer: Earned, but unpaid benefits

Disability policies do NOT normally pay for disabilities arising from which of the following? Answer: War

The monthly benefit for an individual disability income policy is usually limited to a percentage of the insured's income in order to avoid claims the elimination period over insurance adverse selection Answer: Overinsurance

Tom has a rider on his disability income policy that guarantees the right to increase his benefits without a medical exam. What kind of rider is this? Waiver of premium rider Guaranteed benefit rider Payor benefit rider Guaranteed insurability rider Answer: Guaranteed insurability rider

Which of the following statements regarding Group Disability Income insurance is TRUE? It pays 100% or more of an insured's income in the event of disability It provides benefits for nonoccupational illnesses and injuries It is generally more expensive than individual policies It usually pays for occupation-related disabilities Answer: It provides benefits for nonoccupational illnesses and injuries

Tyler purchased a disability policy with a waiver of premium rider on April 1. He is disabled on May 1. On June 1, he receives proof of permanent and total disability, and submits a claim. He begins receiving benefits on June 15. When are his premiums waived? April 1 May 1 June 1 June 15 Answer: May 1

A policyowner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision? Partial disability Nondisabling injury Presumptive disability Flat amount disability Answer: Partial disability

A disability income policy can prevent an insured from earning a higher income than if he/she were working by utilizing elimination periods probationary periods benefit limits deductibles Answer: benefit limits

The factor used most often when underwriting a disability income policy is annual earnings sex of the insured marital status occupation Answer: annual earnings

The waiting period for a disability insurance policy excludes payments for a short-term illness or injury is the period of time that must elapse following the effective date of the policy before benefits are payable helps the insurer determine if the claim is legitimate allows the insurer to collect medical information on the policyowner Answer: Excludes payment for a short-term illness or injury