CEBS Disability & Life Insurance Benefits Flashcards

What is the coordination of benefits (COB) rule in group disability and health insurance?

Answer: A provision that prevents duplicate payments when a claimant has coverage under multiple group plans

COB rules establish which plan pays first (primary) and which pays second (secondary) when an employee has coverage under multiple group plans, preventing total payments from exceeding 100% of the loss.

What is 'integrated' short-term disability coverage in a group benefits context?

Answer: A disability plan coordinated with sick pay or state disability so combined benefits don't exceed a set income percentage

Integrated STD plans coordinate employer sick pay or salary continuation with the STD benefit so the combined income replacement does not exceed a defined percentage (commonly 100%) of pre-disability earnings.

Which federal law requires employers with 50 or more employees to provide up to 12 weeks of unpaid, job-protected leave for serious health conditions, and how does this interact with disability benefits?

Answer: FMLA — employers often run FMLA concurrently with STD/LTD to limit total leave duration

FMLA provides 12 weeks of job-protected leave, and employers commonly designate disability leave as FMLA-qualifying so both run concurrently, limiting the employer's total leave obligation.

What is 'portability' in the context of group life insurance?

Answer: The right for a terminating employee to continue group life coverage at group rates without new underwriting

Group life portability allows employees leaving the company to continue their group life coverage at group rates, without evidence of insurability, for a defined period after termination.

What is the purpose of a 'living benefit' or accelerated death benefit (ADB) rider in group life insurance?

Answer: It allows a terminally ill insured to receive a portion of the death benefit before death

An accelerated death benefit rider allows a terminally ill policyholder to access a portion of the life insurance death benefit while still living, typically when life expectancy is 12-24 months or less.

In group disability plans, what does the term 'own-occupation to any-occupation conversion' mean?

Answer: The disability definition changes from own-occupation to any-occupation after a specified benefit period (commonly 24 months)

Many LTD policies use an own-occupation definition for the first 24 months of disability, then switch to the stricter any-occupation definition, which may result in termination of benefits for partially recovered claimants.