Accident and Sickness Insurance Test Questions with Correct Answers Already Passed
Accident and Sickness Insurance - Answers - protects an individual or a family from the burdens of
medical expenses and income loss arising from ... a health crisis due to physical injury; an illness that
prevents an individual from working; increased medical expenses from a health condition; the need to
pay for long term care
Financial Risks Threatening Families - Answers - include ... unexpected expenses; loss of income or
savings; lower standard of living; inflation; longevity; debt
Personal Risks Threatening Families - Answers - include ... likelihood of disability; loss of independence;
cost of long term care
Needs Met by Accident and Sickness Insurance - Answers A&S Insurance protects an individual's income,
savings, assets
Disability Income Protection - Answers - most common form of A&S Insurance
- replaces the income of a sick or injured worker who is no longer able to work
- policies typically limit the benefit to a specified period or age, or to when the individual returns to work
Savings Protection - Answers - A&S Insurance can protect against unexpected medical concerns
- e.g. travel insurance
Asset Protection - Answers - A&S Insurance can protect assets against the cost of long term care
- e.g. long term care insurance, critical illness insurance
Needs of Business Owners with Accident and Sickness Insurance - Answers - business profitability
- business succession
- sale at fair market value
Disability Insurance - Answers insurance that replaces income loss because of disability/the inability to
work
Individual Disability Insurance - Answers - contracts are structured with... the policy holder who is also
the insured, this person is the one who pays the premiums and on whose disability the benefits are
initiate
- premiums are not tax deductible and benefits are not taxable
Group Disability Insurance - Answers - the policy holder is the group sponsor (employer or union), the
life insured is the group plan member (employee/union member)
, Creditor Disability Insurance - Answers - provided by creditors to borrowers
- intended to cover any remaining loans/debts if the borrower becomes disabled
Mortgage Disability Insurance - Answers - provided by lender to borrower to cover mortgage payments
in part or in whole should the borrower become disabled
Types of Individual Disability Insurance Policies - Answers - non-cancellable
- guaranteed renewable
- cancellable
- guaranteed issue
- non-traditional disability insurance plans
Non-Cancellable Disability Insurance Policies - Answers - referred to as both non-cancellable (non-can)
and guaranteed renewable policies
- offers the most guarantees to the policy holder
- the insurance company cannot cancel the policy, increase the premiums, reduce or change the benefits
- typically carry the highest premiums
- the insurer renews the policy every year until the life insured reaches 65
Guaranteed Renewable Policy - Answers - the insurer is bound to renew the policy every year until the
policy matures at age 65
- the insurer may change the premiums, but they cannot change for one individual, they must change
for everyone of that class type
- the insurer must inform the individual of any changes at least 30 days prior to any change or
cancellation takes effect
- usually issued with an "any occupation" definition of disability
- available to higher-risk occupations
Cancellable Policy - Answers - offers the fewest guarantees and lowest premiums
- issued on a class basis with any policy changes applying to the entire class of individuals who hold that
type of policy
- issued to higher risk occupations
Guaranteed Issue Policy - Answers - only offered by a few insurers
Accident and Sickness Insurance - Answers - protects an individual or a family from the burdens of
medical expenses and income loss arising from ... a health crisis due to physical injury; an illness that
prevents an individual from working; increased medical expenses from a health condition; the need to
pay for long term care
Financial Risks Threatening Families - Answers - include ... unexpected expenses; loss of income or
savings; lower standard of living; inflation; longevity; debt
Personal Risks Threatening Families - Answers - include ... likelihood of disability; loss of independence;
cost of long term care
Needs Met by Accident and Sickness Insurance - Answers A&S Insurance protects an individual's income,
savings, assets
Disability Income Protection - Answers - most common form of A&S Insurance
- replaces the income of a sick or injured worker who is no longer able to work
- policies typically limit the benefit to a specified period or age, or to when the individual returns to work
Savings Protection - Answers - A&S Insurance can protect against unexpected medical concerns
- e.g. travel insurance
Asset Protection - Answers - A&S Insurance can protect assets against the cost of long term care
- e.g. long term care insurance, critical illness insurance
Needs of Business Owners with Accident and Sickness Insurance - Answers - business profitability
- business succession
- sale at fair market value
Disability Insurance - Answers insurance that replaces income loss because of disability/the inability to
work
Individual Disability Insurance - Answers - contracts are structured with... the policy holder who is also
the insured, this person is the one who pays the premiums and on whose disability the benefits are
initiate
- premiums are not tax deductible and benefits are not taxable
Group Disability Insurance - Answers - the policy holder is the group sponsor (employer or union), the
life insured is the group plan member (employee/union member)
, Creditor Disability Insurance - Answers - provided by creditors to borrowers
- intended to cover any remaining loans/debts if the borrower becomes disabled
Mortgage Disability Insurance - Answers - provided by lender to borrower to cover mortgage payments
in part or in whole should the borrower become disabled
Types of Individual Disability Insurance Policies - Answers - non-cancellable
- guaranteed renewable
- cancellable
- guaranteed issue
- non-traditional disability insurance plans
Non-Cancellable Disability Insurance Policies - Answers - referred to as both non-cancellable (non-can)
and guaranteed renewable policies
- offers the most guarantees to the policy holder
- the insurance company cannot cancel the policy, increase the premiums, reduce or change the benefits
- typically carry the highest premiums
- the insurer renews the policy every year until the life insured reaches 65
Guaranteed Renewable Policy - Answers - the insurer is bound to renew the policy every year until the
policy matures at age 65
- the insurer may change the premiums, but they cannot change for one individual, they must change
for everyone of that class type
- the insurer must inform the individual of any changes at least 30 days prior to any change or
cancellation takes effect
- usually issued with an "any occupation" definition of disability
- available to higher-risk occupations
Cancellable Policy - Answers - offers the fewest guarantees and lowest premiums
- issued on a class basis with any policy changes applying to the entire class of individuals who hold that
type of policy
- issued to higher risk occupations
Guaranteed Issue Policy - Answers - only offered by a few insurers
