LIFE AND HEALTH INSURANCE EXAM 3 QUESTIONS
WITH COMPLETE SOLUTION
How much pre-tax income will a typical disability income insurance
policy replace?
66 2/3% - 70%
True or false? Short-term disability is defined as 90 days or less,
while long-term disability is defined as one lasting over 90 days.
false
The risk of a disability is greater than the risk of what three other
exposures?
car accident, house fire, death
Who pays for short-term disability insurance coverage for employees
in the majority of situations?
employer
True or False? The majority of applicants for Social Security disability
benefits are approved and begin receiving benefits immediately.
false
True or False? If an applicant for Social Security disability benefits is
declined but later the decision is overturned, the applicant is entitled
to back benefits to the date of application.
true
What four requirements must be met in order for an applicant to
qualify for Social Security disability benefits?
- must meet the definition of disability
- must satisfy the recent work test
- must satisfy the duration of work test
- must qualify with at least 40 quarters of work
The system disability insurance companies use to categorize the risk
by occupation is known as
class code
True or False? When an insured changes jobs to one that the
insurance company considers "riskier," his or her premium will
increase.
false
Jefferson is a medical device salesperson. He is injured in a traffic
accident and can no longer travel but can be a home office-based
trainer at a lower salary.
, own occupation
Zeyna works as a baker in a commercial bakery. She contracts
Parkinson's disease, causing her hands to shake. She can no longer
decorate baked goods, etc., and she is forced to take a job cleaning
buildings at night for half the pay.
qualified occupation
own occupation
Marcus is a neurosurgeon. Diabetes has made it impossible for him to
stand during surgeries anymore. However, he can read labs. He,
therefore, accepts a position as a pathologist at a similar salary.
own occupation
Janice falls leaving work one day and is partially paralyzed. She can
no longer work at the factory she was employed at previously. She is
effectively bedridden most of the day
any occupation
qualified occupation
own occupation
Izzy is the insured on a disability income insurance policy with a
$4,750 monthly benefit. At the time of his disability, he is earning pre-
tax income of $6,000 per month.
$4,750
Kenny's disability income insurance policy includes a $10,000
monthly benefit. He purchased the policy when he was working at a
large firm. Since then, he has switched to non-profit work. At the time
of his disability, his pre-tax income is just $2,500.
$10,000
Lauren is having a run of bad luck. She recently lost her highpaying
position due to a restructuring. While employed in that position, she
purchased a $12,000 per month benefit disability income insurance
policy. Now, in addition to being out of work and having no income,
she was involved in an auto accident causing her to become disabled.
$12,000
Michael applies for Social Security disability benefits, but his
application is declined.
$5,000
Michael applies for Social Security disability benefits and his
application is declined. However, he appeals the decision and it is
overturned, awarding him $2,200 in monthly SSDI benefits.
$5,000 per month during the appeal process. $2,800 once SSDI benefits
start.
WITH COMPLETE SOLUTION
How much pre-tax income will a typical disability income insurance
policy replace?
66 2/3% - 70%
True or false? Short-term disability is defined as 90 days or less,
while long-term disability is defined as one lasting over 90 days.
false
The risk of a disability is greater than the risk of what three other
exposures?
car accident, house fire, death
Who pays for short-term disability insurance coverage for employees
in the majority of situations?
employer
True or False? The majority of applicants for Social Security disability
benefits are approved and begin receiving benefits immediately.
false
True or False? If an applicant for Social Security disability benefits is
declined but later the decision is overturned, the applicant is entitled
to back benefits to the date of application.
true
What four requirements must be met in order for an applicant to
qualify for Social Security disability benefits?
- must meet the definition of disability
- must satisfy the recent work test
- must satisfy the duration of work test
- must qualify with at least 40 quarters of work
The system disability insurance companies use to categorize the risk
by occupation is known as
class code
True or False? When an insured changes jobs to one that the
insurance company considers "riskier," his or her premium will
increase.
false
Jefferson is a medical device salesperson. He is injured in a traffic
accident and can no longer travel but can be a home office-based
trainer at a lower salary.
, own occupation
Zeyna works as a baker in a commercial bakery. She contracts
Parkinson's disease, causing her hands to shake. She can no longer
decorate baked goods, etc., and she is forced to take a job cleaning
buildings at night for half the pay.
qualified occupation
own occupation
Marcus is a neurosurgeon. Diabetes has made it impossible for him to
stand during surgeries anymore. However, he can read labs. He,
therefore, accepts a position as a pathologist at a similar salary.
own occupation
Janice falls leaving work one day and is partially paralyzed. She can
no longer work at the factory she was employed at previously. She is
effectively bedridden most of the day
any occupation
qualified occupation
own occupation
Izzy is the insured on a disability income insurance policy with a
$4,750 monthly benefit. At the time of his disability, he is earning pre-
tax income of $6,000 per month.
$4,750
Kenny's disability income insurance policy includes a $10,000
monthly benefit. He purchased the policy when he was working at a
large firm. Since then, he has switched to non-profit work. At the time
of his disability, his pre-tax income is just $2,500.
$10,000
Lauren is having a run of bad luck. She recently lost her highpaying
position due to a restructuring. While employed in that position, she
purchased a $12,000 per month benefit disability income insurance
policy. Now, in addition to being out of work and having no income,
she was involved in an auto accident causing her to become disabled.
$12,000
Michael applies for Social Security disability benefits, but his
application is declined.
$5,000
Michael applies for Social Security disability benefits and his
application is declined. However, he appeals the decision and it is
overturned, awarding him $2,200 in monthly SSDI benefits.
$5,000 per month during the appeal process. $2,800 once SSDI benefits
start.
