ALU 202 Exam Chapter 8 (Morbidity Risks) –
Questions With Appropriate Solutions
Save
Terms in this set (59)
Mortality risk The risk of a particular individual dying at any given
time - compared with other individuals of the same
sex and age.
Morbidity Risk The risk of a particular individual contracting a
disease or disabling condition at any given time -
when compared with other individuals of the same
sex and age.
Living Benefit Products Disability, Long-term care, critical illness, accelerated
death benefits. Less mortality data due to being
relative newcomers to the marketplace.
Mortgage Foreclosure 16 times more likely due to disability than death.
Disability Insurance Benefits are paid under the terms of the policy if the
insurable event occurs. Benefit occurs after a defined
period of time (waiting period) for a defined length
of time (benefit period).
Premiums previously deducted for tax Any benefits paid would usually be taxable.
purposes
Permanent Disability No longer able to perform two or more activities of
daily living.
Disability Insurance (Types of renew Conditionally renewable (non-traditional);
provisions) guaranteed renewable and non-cancelable (both are
traditional)
, Canadian Tax Law (disability payment) Not considered a disposition and does not generate
taxable income.
Conditionally renewable policies Known as cancelable and non-traditional. Allow the
most flexibility (for the insurance company) in making
changes to in force policies. Must change all
premium or cancel policies for all policyholders
within a class. Some contracts include provisions for
cancellation or adjustment to an individual's policy
(new occupation declinable).
Conditionally renewable (Class) Defined by age, gender, a specific waiting period,
benefit period, occupation, or policy type.
Guaranteed Renewable Policy Referred to as "traditional". Cannot be canceled or
have provisions changed (if premiums on time).
Lower premium initially - possible increased premium
if company is experiencing poor claims history. Less
restrictive underwriting.
Conditionally Renewable (Types of Looking for low-cost disability, high risk and/or lower
customers) skilled occupations, or do not qualify for traditional
disability insurance.
Non-Cancelable Policy Most strictly underwritten (greatest risk to the
company). If premium paid on time, company cannot
increase premium or add additional charges, change
or add provisions, cancel the policy (usually to age
65).
Non-Cancelable Policy (After the time Premiums are usually no longer guaranteed and are
limit) based on the attained age on an annual basis, waiting
period remains unchanged but the benefit period is
reduced to 12 or 24 months, definition of disability is
'total', and any benefit riders are terminated.
Disability definitions Own occupation, regular occupation, any occupation
Questions With Appropriate Solutions
Save
Terms in this set (59)
Mortality risk The risk of a particular individual dying at any given
time - compared with other individuals of the same
sex and age.
Morbidity Risk The risk of a particular individual contracting a
disease or disabling condition at any given time -
when compared with other individuals of the same
sex and age.
Living Benefit Products Disability, Long-term care, critical illness, accelerated
death benefits. Less mortality data due to being
relative newcomers to the marketplace.
Mortgage Foreclosure 16 times more likely due to disability than death.
Disability Insurance Benefits are paid under the terms of the policy if the
insurable event occurs. Benefit occurs after a defined
period of time (waiting period) for a defined length
of time (benefit period).
Premiums previously deducted for tax Any benefits paid would usually be taxable.
purposes
Permanent Disability No longer able to perform two or more activities of
daily living.
Disability Insurance (Types of renew Conditionally renewable (non-traditional);
provisions) guaranteed renewable and non-cancelable (both are
traditional)
, Canadian Tax Law (disability payment) Not considered a disposition and does not generate
taxable income.
Conditionally renewable policies Known as cancelable and non-traditional. Allow the
most flexibility (for the insurance company) in making
changes to in force policies. Must change all
premium or cancel policies for all policyholders
within a class. Some contracts include provisions for
cancellation or adjustment to an individual's policy
(new occupation declinable).
Conditionally renewable (Class) Defined by age, gender, a specific waiting period,
benefit period, occupation, or policy type.
Guaranteed Renewable Policy Referred to as "traditional". Cannot be canceled or
have provisions changed (if premiums on time).
Lower premium initially - possible increased premium
if company is experiencing poor claims history. Less
restrictive underwriting.
Conditionally Renewable (Types of Looking for low-cost disability, high risk and/or lower
customers) skilled occupations, or do not qualify for traditional
disability insurance.
Non-Cancelable Policy Most strictly underwritten (greatest risk to the
company). If premium paid on time, company cannot
increase premium or add additional charges, change
or add provisions, cancel the policy (usually to age
65).
Non-Cancelable Policy (After the time Premiums are usually no longer guaranteed and are
limit) based on the attained age on an annual basis, waiting
period remains unchanged but the benefit period is
reduced to 12 or 24 months, definition of disability is
'total', and any benefit riders are terminated.
Disability definitions Own occupation, regular occupation, any occupation
