Life & Health Insurance Disability Income Insurance Flashcards
7 cards from real Life & Health Insurance Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Life & Health Insurance Disability Income Insurance flashcards as text
What is the 'elimination period' in a disability income insurance policy?
Answer: The waiting period before benefits begin after a disability occurs
The elimination period is a waiting period that begins when the insured becomes disabled; benefits do not start until this period ends, similar to a deductible expressed in time.
Under an 'own occupation' definition of disability, an insured is considered totally disabled if they:
Answer: Cannot perform the material duties of their specific occupation
Under own occupation, a person is disabled if they cannot perform the duties of their specific occupation, even if they could work in another field.
A non-cancelable disability income policy guarantees which of the following?
Answer: The insurer cannot raise premiums or reduce benefits as long as premiums are paid
A non-cancelable policy locks in both the premium and the benefit amount, preventing the insurer from changing terms as long as the policyholder continues paying premiums.
What is a residual disability benefit in a disability income policy?
Answer: A partial benefit paid when the insured can work but suffers a loss of income
Residual disability benefits provide a partial payment proportional to the insured's loss of income when they can still work but not at full capacity.
Disability income benefits are typically limited to what percentage of the insured's pre-disability earned income?
Answer: 50–70%
Insurers typically cap disability income benefits at 50–70% of pre-disability earnings to maintain a financial incentive for the insured to return to work.
Which type of disability income policy allows the insurer to increase premiums at renewal but prohibits outright cancellation?
Answer: Guaranteed renewable policy
A guaranteed renewable policy cannot be canceled as long as premiums are paid, but the insurer may adjust premiums on a class basis at renewal.
Which event most commonly triggers the payment of disability income benefits?
Answer: The insured becoming unable to perform occupational duties due to sickness or injury
Disability income benefits are triggered when the insured is unable to perform their occupational duties because of a covered sickness or accidental injury.