Disability Income Insurance Flashcards
6 cards from real Life and Health California Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Disability Income Insurance flashcards as text
The 'elimination period' in a disability income policy is best described as:
Answer: A waiting period after disability begins before benefits are paid
The elimination period is a time deductible—a specified number of days the insured must be disabled before disability income benefits begin.
Under an 'own-occupation' definition of disability, benefits are paid when the insured:
Answer: Cannot perform the material duties of their own specific occupation
Own-occupation disability means benefits are payable if the insured cannot perform the duties of their specific occupation, even if they could work in another field.
A disability income policy with a benefit period of 'to age 65' means:
Answer: Benefits are paid until the insured reaches age 65, if disabled that long
A benefit period 'to age 65' means the insurer will continue paying monthly disability benefits until the insured turns 65, as long as total disability persists.
Which disability income policy rider pays an additional monthly benefit if the insured is disabled and requires assistance with activities of daily living?
Answer: Catastrophic disability rider
A catastrophic disability rider provides an additional benefit when a totally disabled insured also needs help with activities of daily living or has cognitive impairment.
Disability income benefits received by an employee are generally taxable when:
Answer: The employer paid the premiums with pre-tax dollars
If the employer pays disability insurance premiums with pre-tax dollars, the benefits received by the employee are subject to ordinary income tax.
What is the purpose of a 'residual disability' benefit in a disability income policy?
Answer: It pays a partial benefit when the insured returns to work but suffers a loss of income due to disability
A residual disability benefit pays a proportionate monthly benefit when the insured can work but earns less income than before due to their disability.