HURM 4640 EXAM 2 (CH. 8-13) QUESTIONS AND ANSWERS
Workers comp. plans provide complete medical care for work-connected injuries with no waiting period.
T or F - CORRECT ANSWER✅✅T
The cost of state Worker's comp plans are placed completely on employees. T or F - CORRECT
ANSWER✅✅T
The cost of state Worker's comp. plans is experience rated and vary according to the risks of the various
occupations of the employees, the actual experience of the employer and, to some extent, by the size of
the firm's workforce. T or F - CORRECT ANSWER✅✅T
Most salary continuation plans require an employee to satisfy a short (1-3 month) probationary period
before becoming eligible for benefits. T or F - CORRECT ANSWER✅✅T
Most salary continuation plans are designed to provide benefits equal to no more than 50% of an
employee's regular pay. T or F - CORRECT ANSWER✅✅F
A person is more likely to be disabled for at least 90 days before the age of 65 than to die. T or F -
CORRECT ANSWER✅✅T
The primary reason for coordinating group disability income benefits with other sources of disability
income benefits is that the lack of coordination can lead to such a generous level of benefits that
absences from work because of disability might either be falsified or unnecessarily prolonged. T or F -
CORRECT ANSWER✅✅T
Salary continuation plans usually replace 100% of salary at least in the short term. T or F - CORRECT
ANSWER✅✅T
A majority of long-term disability plans use a dual definition of disability that is more liberal at first and
becomes more restrictive after 24 to 36 months. T or F - CORRECT ANSWER✅✅T
,Short-term disability income contracts most often provide coverage for partial disabilities. T or F -
CORRECT ANSWER✅✅F
In most short-term disability contracts, there is no waiting period for disabilities resulting from
accidents. T or F - CORRECT ANSWER✅✅T (1-7 days for illness. Short-term disability usually from
nonoccupational illness or accidents)
Short-term plans most often have a benefit reduction for older employees. T or F - CORRECT
ANSWER✅✅F (Short term plans do not usually have a benefit reduction for older employees since the
duration of the benefit is limited)
Short-term disability plans are often integrated with other disability income benefits. T or F - CORRECT
ANSWER✅✅F (If only nonoccupational injuries are covered, there is no need for integration with
Worker's Comp. benefits)
Employer contributions to disability income plans are fully deductible as an ordinary and necessary
business expense if the overall compensation of the employee is reasonable. T or F - CORRECT
ANSWER✅✅T
Employer contributions for disability income insurance of not result in taxable income to an employee. T
or F - CORRECT ANSWER✅✅T (However, benefit may be taxable, particularly if they are funded with
employer contributions)
Employers are less likely to provide disability coverage than either life insurance or medical expense
benefits. T or F - CORRECT ANSWER✅✅T
Premiums for salary continuation plans (sick leave) are usually paid by the employer. T or F - CORRECT
ANSWER✅✅F (Uninsured by definition)
Usually, sick leave plans are uninsured by definition. T or F - CORRECT ANSWER✅✅T
Which of the following statements concerning salary continuation plans (sick pay) is/are correct?
,I. Most plans require an employee to satisfy a probationary period before becoming eligible for benefits.
II. Most plans are designed to provide benefits equal to no more than 50% of an employee's regular pay.
a. I only
b. II only
c. Both
d. Neither - CORRECT ANSWER✅✅A
All the following statements concerning group disability income contracts are correct EXCEPT?
A. The insurance company usually offers a conversion policy to any terminating employee who was
covered under the contract for at least 2 years.
B. The insurance company has the right to have a disabled employee examined by a physician of its own
choice.
C. The insurance company has no obligations to make benefit payments until a proof of loss has been
filed.
D. The insurance company often allows a worker to enter a trial work period in rehabilitative
employment without having benefits totally terminated. - CORRECT ANSWER✅✅A
All the following statements concerning the eligibility requirements of insured disability income plans
are correct EXCEPT?
A. Most plans require an employee to be actively at work before coverage will commence.
B. Long-term plans often limit eligibility to salaried employees only.
, C. Short-term plans tend to have longer probationary periods than do long-term plans.
D. Short-term plans sometimes limit eligibility to union employees only. - CORRECT ANSWER✅✅C
Which of the following statements concerning insured group disability income benefits is correct?
A. Short-term plans typically pay benefits for a duration of between 2 and 5 years.
B. Short-term plans usually reduce either the duration or periodic amount of benefits for older workers.
C. Most long-term plans have a shorter waiting period for disabilities arising from accidents than for
disabilities arising from sickness.
D. Both long-term and short-term plans usually place a dollar maximum on periodic benefits, regardless
of worker's earnings. - CORRECT ANSWER✅✅D
Which of the following statements concerning the typical group short-term disability insurance contract
is correct?
A. Partial disabilities are covered.
B. Occupational injuries are covered.
C. There is a waiting period of 30 to 60 days before benefits for sickness begin.
D. The maximum benefit period applies to each separate disability. - CORRECT ANSWER✅✅D
All the following causes of disability are covered under a typical group short-term disability income
contract EXCEPT:
Workers comp. plans provide complete medical care for work-connected injuries with no waiting period.
T or F - CORRECT ANSWER✅✅T
The cost of state Worker's comp plans are placed completely on employees. T or F - CORRECT
ANSWER✅✅T
The cost of state Worker's comp. plans is experience rated and vary according to the risks of the various
occupations of the employees, the actual experience of the employer and, to some extent, by the size of
the firm's workforce. T or F - CORRECT ANSWER✅✅T
Most salary continuation plans require an employee to satisfy a short (1-3 month) probationary period
before becoming eligible for benefits. T or F - CORRECT ANSWER✅✅T
Most salary continuation plans are designed to provide benefits equal to no more than 50% of an
employee's regular pay. T or F - CORRECT ANSWER✅✅F
A person is more likely to be disabled for at least 90 days before the age of 65 than to die. T or F -
CORRECT ANSWER✅✅T
The primary reason for coordinating group disability income benefits with other sources of disability
income benefits is that the lack of coordination can lead to such a generous level of benefits that
absences from work because of disability might either be falsified or unnecessarily prolonged. T or F -
CORRECT ANSWER✅✅T
Salary continuation plans usually replace 100% of salary at least in the short term. T or F - CORRECT
ANSWER✅✅T
A majority of long-term disability plans use a dual definition of disability that is more liberal at first and
becomes more restrictive after 24 to 36 months. T or F - CORRECT ANSWER✅✅T
,Short-term disability income contracts most often provide coverage for partial disabilities. T or F -
CORRECT ANSWER✅✅F
In most short-term disability contracts, there is no waiting period for disabilities resulting from
accidents. T or F - CORRECT ANSWER✅✅T (1-7 days for illness. Short-term disability usually from
nonoccupational illness or accidents)
Short-term plans most often have a benefit reduction for older employees. T or F - CORRECT
ANSWER✅✅F (Short term plans do not usually have a benefit reduction for older employees since the
duration of the benefit is limited)
Short-term disability plans are often integrated with other disability income benefits. T or F - CORRECT
ANSWER✅✅F (If only nonoccupational injuries are covered, there is no need for integration with
Worker's Comp. benefits)
Employer contributions to disability income plans are fully deductible as an ordinary and necessary
business expense if the overall compensation of the employee is reasonable. T or F - CORRECT
ANSWER✅✅T
Employer contributions for disability income insurance of not result in taxable income to an employee. T
or F - CORRECT ANSWER✅✅T (However, benefit may be taxable, particularly if they are funded with
employer contributions)
Employers are less likely to provide disability coverage than either life insurance or medical expense
benefits. T or F - CORRECT ANSWER✅✅T
Premiums for salary continuation plans (sick leave) are usually paid by the employer. T or F - CORRECT
ANSWER✅✅F (Uninsured by definition)
Usually, sick leave plans are uninsured by definition. T or F - CORRECT ANSWER✅✅T
Which of the following statements concerning salary continuation plans (sick pay) is/are correct?
,I. Most plans require an employee to satisfy a probationary period before becoming eligible for benefits.
II. Most plans are designed to provide benefits equal to no more than 50% of an employee's regular pay.
a. I only
b. II only
c. Both
d. Neither - CORRECT ANSWER✅✅A
All the following statements concerning group disability income contracts are correct EXCEPT?
A. The insurance company usually offers a conversion policy to any terminating employee who was
covered under the contract for at least 2 years.
B. The insurance company has the right to have a disabled employee examined by a physician of its own
choice.
C. The insurance company has no obligations to make benefit payments until a proof of loss has been
filed.
D. The insurance company often allows a worker to enter a trial work period in rehabilitative
employment without having benefits totally terminated. - CORRECT ANSWER✅✅A
All the following statements concerning the eligibility requirements of insured disability income plans
are correct EXCEPT?
A. Most plans require an employee to be actively at work before coverage will commence.
B. Long-term plans often limit eligibility to salaried employees only.
, C. Short-term plans tend to have longer probationary periods than do long-term plans.
D. Short-term plans sometimes limit eligibility to union employees only. - CORRECT ANSWER✅✅C
Which of the following statements concerning insured group disability income benefits is correct?
A. Short-term plans typically pay benefits for a duration of between 2 and 5 years.
B. Short-term plans usually reduce either the duration or periodic amount of benefits for older workers.
C. Most long-term plans have a shorter waiting period for disabilities arising from accidents than for
disabilities arising from sickness.
D. Both long-term and short-term plans usually place a dollar maximum on periodic benefits, regardless
of worker's earnings. - CORRECT ANSWER✅✅D
Which of the following statements concerning the typical group short-term disability insurance contract
is correct?
A. Partial disabilities are covered.
B. Occupational injuries are covered.
C. There is a waiting period of 30 to 60 days before benefits for sickness begin.
D. The maximum benefit period applies to each separate disability. - CORRECT ANSWER✅✅D
All the following causes of disability are covered under a typical group short-term disability income
contract EXCEPT:
