EXAMFX Workers Compensation and Disability Insurance 2

Question 1

Which type of disability income policy provision prevents an insurer from canceling coverage as long as premiums are paid?

Accepted Answer

Noncancelable provision

Answer

A noncancelable policy guarantees the insurer cannot cancel the policy or raise premiums as long as the policyholder continues to pay the premium on time.

Question 2

In a disability income policy, what is the 'elimination period'?

Accepted Answer

The time the insured must be disabled before benefits begin

Answer

The elimination period is a waiting period at the start of disability during which no benefits are paid; it functions like a deductible measured in time rather than dollars.

Question 3

Which definition of disability is more favorable to the insured under a disability income policy?

Accepted Answer

Own occupation definition

Answer

The own-occupation definition pays benefits if the insured cannot perform the duties of their specific occupation, even if they could work in a different job.

Question 4

Which provision in a disability income policy allows the insured to receive partial benefits when they return to work part-time after a total disability?

Accepted Answer

Residual disability benefit

Answer

The residual disability benefit pays proportional benefits when an insured returns to work part-time or at reduced earnings after a period of total disability.

Question 5

Under a group short-term disability (STD) plan, what is the typical maximum benefit duration?

Accepted Answer

Up to 26 weeks

Answer

Group short-term disability plans typically provide benefits for up to 13 to 26 weeks, bridging the gap until long-term disability benefits begin.

(EXAMFX) Exam FX Insurance Practice Test

(EXAMFX) Exam FX Insurance Practice Test

EXAMFX Workers Compensation and Disability Insurance 2