Financial Advisor Insurance Planning for Financial Advisors 2

Question 1

Which definition of disability in a disability income insurance policy is most favorable to the insured?

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 can work in another field.

Question 2

In a disability income insurance policy, the 'elimination period' is best described as:

Accepted Answer

The waiting period after disability onset before benefit payments begin

Answer

The elimination period is essentially a deductible measured in time — benefits do not begin until the insured has been disabled for the specified waiting period (e.g., 60 or 90 days).

Question 3

Long-term care insurance benefits are typically triggered when the insured is unable to perform a specified number of Activities of Daily Living (ADLs). What is the standard minimum number of ADL impairments required?

Accepted Answer

2 of 6 ADLs

Answer

Federal tax law requires that tax-qualified LTC policies pay benefits when the insured is unable to perform at least 2 of 6 ADLs (bathing, continence, dressing, eating, toileting, transferring).

Question 4

Under Medicare, which part covers inpatient hospital stays, skilled nursing facility care, and hospice services?

Accepted Answer

Medicare Part A

Answer

Medicare Part A is the hospital insurance portion that covers inpatient hospital care, skilled nursing facility stays (following a qualifying hospital stay), hospice, and some home health care.

Question 5

A Health Savings Account (HSA) can only be opened and funded by individuals enrolled in which type of health plan?

Accepted Answer

A High-Deductible Health Plan (HDHP)

Answer

HSA eligibility requires enrollment in an IRS-qualified HDHP; individuals covered by Medicare, a general-purpose FSA, or other non-HDHP coverage are ineligible.

Financial Advisor Practice Test

Financial Advisor Practice Test

Financial Advisor Insurance Planning for Financial Advisors 2