DC DC Disability and Long-Term Care Insurance

Question 1

Individual disability income insurance sold in DC is designed primarily to:

Accepted Answer

Replace a portion of the insured's earned income if they become unable to work due to disability

Answer

Pay medical bills when the insured is sick or injured

Answer

Cover long-term nursing home costs

Answer

Provide a lump-sum death benefit if the insured dies from illness

Question 2

In DC, a disability income policy that uses an 'own-occupation' definition of disability means benefits are paid when the insured:

Accepted Answer

Cannot perform the material duties of their specific occupation

Answer

Cannot perform any job in the national economy

Answer

Is hospitalized for more than 30 days

Answer

Loses at least 50% of their income

Question 3

The 'elimination period' in a DC disability income policy functions similarly to:

Accepted Answer

A waiting period before benefits begin, similar to a deductible

Answer

The maximum period benefits can be paid

Answer

A provision that eliminates pre-existing condition coverage

Answer

The grace period for premium payments

Question 4

Under DC insurance regulations, long-term care (LTC) insurance policies must include which consumer protection feature?

Accepted Answer

A nonforfeiture benefit option in case the insured stops paying premiums

Answer

A guaranteed renewable provision with locked-in premiums

Answer

A 60-day free-look period

Answer

Automatic inflation adjustments of 10% per year

Question 5

A DC long-term care insurance policy that covers care in a nursing facility, assisted living facility, and at home is best described as:

Accepted Answer

A comprehensive (integrated) LTC policy

Answer

An institutional-only LTC policy

Answer

A skilled nursing facility rider

Answer

A supplemental health policy

Question 6

In DC, disability income benefits received under an individually purchased policy funded entirely with after-tax premiums are generally:

Accepted Answer

Tax-free to the recipient

Answer

Fully taxable as ordinary income

Answer

Taxable only if benefits exceed $50,000 per year

Answer

Subject to DC income tax but not federal income tax