Basics of Disability Insurance
What does disability insurance typically cover?
- A) Dental care
- B) Long-term care
- C) Disability income replacement
- D) Home insurance
C) Disability income replacement
Which type of disability insurance provides coverage for self-employed individuals?
- A) Private disability insurance
- B) Workers' compensation
- C) Social Security Disability Insurance (SSDI)
- D) Group disability insurance
A) Private disability insurance
What is the first step in filing a disability insurance claim?
- A) Contacting the insurance agent
- B) Providing medical evidence
- C) Notifying the employer
- D) Waiting for approval
C) Notifying the employer
What is a "waiver of premium" rider in disability insurance?
- A) Option to reduce premium payments
- B) Additional coverage for high-risk occupations
- C) Premium payment extension period
- D) Premiums are waived during disability
D) Premiums are waived during disability
What legal protection does the Americans with Disabilities Act (ADA) provide to individuals with disabilities?
- A) Protection against natural disasters
- B) Equal employment opportunities
- C) Compensation for disability claims
- D) Guaranteed disability coverage
B) Equal employment opportunities
What is the purpose of short-term disability insurance?
- A) Covering disabilities lasting less than a year
- B) Providing lifetime coverage
- C) Protecting against natural disasters
- D) Offering retirement benefits
A) Covering disabilities lasting less than a year
What does long-term disability insurance focus on?
- A) Covering short-term illnesses
- B) Providing coverage for a specific age group
- C) Protecting against disabilities lasting several years
- D) Offering coverage for specific occupations
C) Protecting against disabilities lasting several years
Which category of disabilities is often excluded from coverage in disability insurance policies?
- A) Pre-existing conditions
- B) Work-related injuries
- C) Genetic disorders
- D) Temporary illnesses
A) Pre-existing conditions
How does a cost-of-living adjustment (COLA) rider benefit the insured in disability insurance?
- A) Increases coverage amount annually
- B) Reduces premiums over time
- C) Provides a lump sum payment
- D) Offers coverage for specific illnesses
A) Increases coverage amount annually
How does the Family and Medical Leave Act (FMLA) relate to disability insurance?
- A) Provides disability insurance coverage
- B) Extends waiting periods for disability claims
- C) Offers job protection during certain medical leaves
- D) Requires employers to offer disability insurance
C) Offers job protection during certain medical leaves
Who pays the premiums for Social Security Disability Insurance (SSDI)?
- A) Government
- B) Employer
- C) Employee
- D) Both employer and employee
D) Both employer and employee
Which profession is more likely to require specialized disability insurance due to unique risks?
- A) Office workers
- B) Construction workers
- C) Teachers
- D) Retail workers
B) Construction workers
How does an own-occupation disability insurance policy define disability?
- A) Inability to perform any job
- B) Inability to perform the insured's specific occupation
- C) Permanent disability
- D) Disabilities caused by accidents only
B) Inability to perform the insured's specific occupation
What is the purpose of the rehabilitation benefit in disability insurance?
- A) Covering medical rehabilitation costs
- B) Providing vocational training
- C) Offering coverage for mental illnesses
- D) Reimbursing travel expenses
B) Providing vocational training
In the context of disability insurance, what is the principle of utmost good faith?
- A) Insured must disclose all relevant information
- B) Insurer can deny claims without investigation
- C) No obligation to disclose pre-existing conditions
- D) Insurer must always pay claims
A) Insured must disclose all relevant information
What is the elimination period in disability insurance?
- A) Waiting period before coverage starts
- B) Time limit for making a claim
- C) Premium payment deadline
- D) Grace period for late payments
A) Waiting period before coverage starts
What is the key difference between short-term and long-term disability insurance?
- A) Elimination period
- B) Coverage duration
- C) Premium amount
- D) Waiting period
B) Coverage duration
What role does the attending physician's statement play in the disability insurance claim process?
- A) Determines the premium amount
- B) Establishes the elimination period
- C) Provides medical evidence
- D) Approves claim payments
C) Provides medical evidence
How does a residual disability benefit differ from a total disability benefit?
- A) Residual benefit covers only permanent disabilities
- B) Total disability benefit has a waiting period
- C) Residual benefit covers partial disabilities
- D) Total disability benefit requires higher premiums
C) Residual benefit covers partial disabilities
How does the concept of "moral hazard" apply to disability insurance?
- A) It refers to unethical insurance practices
- B) It involves intentional actions to cause disability
- C) It implies fraudulent claims by policyholders
- D) It's a term unrelated to insurance
C) It implies fraudulent claims by policyholders
How is disability insurance benefit usually calculated?
- A) Based on the insured's age
- B) Percentage of pre-disability income
- C) Fixed amount for all policyholders
- D) Determined by the government
B) Percentage of pre-disability income
In group disability insurance, who is the master policyholder?
- A) Insurance company
- B) Employer or organization
- C) Individual policyholder
- D) Government
B) Employer or organization
In residual disability insurance, what does the term "partial disability" refer to?
- A) Complete inability to work
- B) Temporary disability
- C) Inability to perform specific job duties
- D) Disabilities caused by natural disasters
C) Inability to perform specific job duties
What does the future increase option rider allow the insured to do?
- A) Decrease coverage amount
- B) Change the elimination period
- C) Increase coverage without medical underwriting
- D) Convert to a different type of insurance
C) Increase coverage without medical underwriting
What role does the National Association of Insurance Commissioners (NAIC) play in regulating disability insurance?
- A) Sets premiums for disability policies
- B) Provides disability insurance to individuals
- C) Establishes ethical standards for insurers
- D) Determines eligibility for disability benefits
C) Establishes ethical standards for insurers