Life and Health California Exam Disability Income Insurance 2

Question 1

Which of the following best describes the 'any-occupation' definition of total disability?

Accepted Answer

The insured cannot perform any occupation for which they are reasonably suited by education, training, or experience

Answer

Any-occupation total disability requires that the insured be unable to engage in any occupation for which they are reasonably suited—a stricter standard than own-occupation.

Question 2

A disability income policy that cannot be canceled and whose premiums cannot be increased is called:

Accepted Answer

Non-cancelable

Answer

A non-cancelable policy guarantees the insurer cannot cancel coverage or raise premiums as long as the insured pays the stated premium.

Question 3

Under a business overhead expense (BOE) disability policy, which of the following is a covered expense?

Accepted Answer

Employee salaries, rent, and utilities of the business

Answer

BOE policies reimburse a disabled business owner for the fixed overhead expenses of running the business, such as employee salaries, rent, and utilities.

Question 4

A 'cost of living adjustment' (COLA) rider on a disability income policy:

Accepted Answer

Increases the benefit amount annually to keep pace with inflation during a disability

Answer

The COLA rider automatically increases the monthly disability benefit each year, often tied to the CPI, to protect the insured's purchasing power during a long-term disability.

Question 5

If a disability income policy has a 90-day elimination period and the insured becomes disabled on January 1, when will the first benefit payment typically be made?

Accepted Answer

April 1

Answer

After a 90-day elimination period beginning January 1, the insured satisfies the waiting period on April 1, and the first benefit payment is issued for that date.

Life and Health California Exam Practice Test

Life and Health California Exam Practice Test

Life and Health California Exam Disability Income Insurance 2