DC DC Disability and Long-Term Care Insurance 2 — Questions and Answers
Question 1: A DC LTC insurance policy's 'benefit trigger' most commonly requires the insured to be unable to perform a certain number of activities of daily living (ADLs). The standard number is:
- 1 of 3
- 2 of 6 (Correct answer)
- 3 of 9
- 4 of 4
Correct answer: 2 of 6
Most LTC policies trigger benefits when the insured is unable to perform at least 2 of 6 standard ADLs: bathing, continence, dressing, eating, toileting, and transferring.
Question 2: Which DC disability income policy provision ensures the insurer cannot cancel the policy or raise premiums as long as the insured pays premiums on time?
- Conditionally renewable
- Optionally renewable
- Guaranteed renewable (Correct answer)
- Non-cancelable
Correct answer: Guaranteed renewable
A guaranteed renewable policy cannot be canceled by the insurer as long as premiums are paid, though the insurer may increase premiums for an entire class of policyholders.
Question 3: In a DC disability income policy, a 'residual disability' benefit is designed to pay benefits when:
- The insured is totally disabled and cannot work at all
- The insured returns to work but suffers a proportionate loss of income due to their disability (Correct answer)
- The insured is hospitalized overnight
- The insured's disability results from a pre-existing condition
Correct answer: The insured returns to work but suffers a proportionate loss of income due to their disability
Residual (partial) disability benefits compensate the insured for proportional income loss when they return to work on a limited basis due to their disabling condition.
Question 4: A DC LTC insurer must offer a 'free-look' period of at least how many days for a newly issued LTC policy?
- 10 days
- 30 days (Correct answer)
- 60 days
- 90 days
Correct answer: 30 days
DC LTC insurance regulations require a 30-day free-look period, giving consumers more time than the standard 10-day period for other life/health products to review and return the policy.
Question 5: Under DC law, a group disability income policy provided by an employer is typically subject to:
- Only DC insurance regulations
- ERISA (federal law) in addition to DC insurance regulations (Correct answer)
- Only OSHA regulations
- The DC Workers' Compensation Act
Correct answer: ERISA (federal law) in addition to DC insurance regulations
Employer-sponsored group disability plans are governed by ERISA at the federal level as well as applicable DC insurance regulations for the insurance component.
Question 6: A DC disability income policy that includes a 'social insurance substitute' benefit will reduce its benefit payment when the insured:
- Earns income from part-time work
- Receives Social Security disability benefits (Correct answer)
- Files a workers' compensation claim
- Reaches retirement age
Correct answer: Receives Social Security disability benefits
A social insurance substitute (SIS) provision reduces the private disability benefit by the amount the insured receives from Social Security disability (SSDI) or similar government programs.
DC DC Disability and Long-Term Care Insurance 2
A DC LTC insurance policy's 'benefit trigger' most commonly requires the insured to be unable to perform a certain number of activities of daily living (ADLs).
The standard number is: