Life & Health Insurance Exam Life & Health Insurance Disability Income Insurance

Question 1

What is the 'elimination period' in a disability income insurance policy?

Accepted Answer

The waiting period before benefits begin after a disability occurs

Answer

The period after which the policy expires

Answer

The maximum period for which benefits are paid

Answer

The period during which the insurer can cancel the policy

Question 2

Under an 'own occupation' definition of disability, an insured is considered totally disabled if they:

Accepted Answer

Cannot perform the material duties of their specific occupation

Answer

Cannot perform any job for which they are reasonably suited

Answer

Are hospitalized for more than 30 days

Answer

Cannot work more than 20 hours per week

Question 3

A non-cancelable disability income policy guarantees which of the following?

Accepted Answer

The insurer cannot raise premiums or reduce benefits as long as premiums are paid

Answer

Benefits increase automatically each year

Answer

The policy converts to life insurance at age 65

Answer

The insurer will pay benefits regardless of the cause of disability

Question 4

What is a residual disability benefit in a disability income policy?

Accepted Answer

A partial benefit paid when the insured can work but suffers a loss of income

Answer

A benefit paid only after total disability ends permanently

Answer

A benefit paid to the insured's estate upon death during disability

Answer

A bonus paid if the insured never files a claim

Question 5

Disability income benefits are typically limited to what percentage of the insured's pre-disability earned income?

Accepted Answer

50–70%

Answer

25–40%

Answer

80–90%

Answer

100%

Question 6

Which type of disability income policy allows the insurer to increase premiums at renewal but prohibits outright cancellation?

Accepted Answer

Guaranteed renewable policy

Answer

Non-cancelable policy

Answer

Conditionally renewable policy

Answer

Optionally renewable policy

Question 7

Which event most commonly triggers the payment of disability income benefits?

Accepted Answer

The insured becoming unable to perform occupational duties due to sickness or injury

Answer

The insured reaching age 60

Answer

The insured being hospitalized overnight

Answer

The insured's employer terminating their employment