Accident and Sickness Insurance Flashcards

A policyholder is injured in a car accident and cannot work for 6 months. Which provision in a disability income policy determines the amount of benefit paid per month?

Answer: The benefit amount provision

The benefit amount provision specifies the monthly dollar amount the insured receives when totally disabled.

Under a group accident and sickness plan, which of the following is typically NOT considered an eligible dependent?

Answer: Grandparent living in the insured's household

Grandparents are generally not recognized as eligible dependents under standard group health insurance plans.

The 'any occupation' definition of total disability is considered more restrictive than the 'own occupation' definition because:

Answer: The insured must be unable to perform any job for which they are reasonably suited

Under 'any occupation,' benefits are only paid if the insured cannot work in any job suited to their education and experience, making it harder to qualify.

An insured purchases a critical illness policy. She is later diagnosed with a covered condition. How are benefits typically paid under this type of policy?

Answer: As a lump-sum payment upon diagnosis

Critical illness policies pay a lump-sum benefit upon diagnosis of a covered condition, regardless of actual medical expenses.

Which of the following statements about the 'pre-existing condition' exclusion period is CORRECT under individual accident and sickness policies?

Answer: It is a temporary period during which benefits for conditions existing before the policy are limited or excluded

A pre-existing condition exclusion is typically a time-limited period, not a permanent exclusion, after which coverage for those conditions may begin.

Under the LLQP framework, which type of accident and sickness benefit specifically replaces income lost due to a short-term disability lasting weeks to a few months?

Answer: Short-term disability insurance

Short-term disability insurance is designed to replace income during brief disability periods, typically ranging from a few weeks up to two years.

An insured's disability income policy includes a cost-of-living adjustment (COLA) rider. What is the primary purpose of this rider?

Answer: To increase benefit payments over time to keep pace with inflation

The COLA rider increases disability benefit payments periodically, usually tied to an inflation index, to preserve purchasing power.