Disability Income Insurance Flashcards
6 cards from real Life and Health California Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Disability Income Insurance flashcards as text
What is a 'recurrent disability' clause in a disability income policy?
Answer: A clause treating a return of the same disability within a specified period as a continuation of the original claim
The recurrent disability clause treats a relapse of the same disability within a defined period (often 6 months) as a continuation of the prior claim, so a new elimination period is not required.
Under a disability buyout policy, the benefit is used to:
Answer: Fund the purchase of a disabled partner's business interest by the remaining partners
A disability buyout policy funds a buy-sell agreement by providing a lump sum or installment payments to the remaining partners to buy out a permanently disabled partner's interest.
For California individual disability income policies, the maximum probationary period for sickness is:
Answer: No limit
California does not set a statutory maximum on probationary (waiting) periods for sickness under individual disability income policies, leaving it to the contract terms.
Which of the following is TRUE about Social Security Disability Insurance (SSDI) and private disability income insurance?
Answer: Some private policies have a 'social insurance substitute' rider that reduces benefits when SSDI is received
A social insurance substitute (SIS) rider pays a higher benefit while an SSDI claim is pending and reduces the benefit once SSDI is approved, keeping total income at the target amount.
A disability income policy's 'presumptive disability' provision provides benefits if the insured:
Answer: Suffers loss of sight, hearing, speech, or two limbs, regardless of ability to work
Presumptive disability provisions automatically pay total disability benefits if the insured loses sight, hearing, speech, or use of two limbs, without requiring proof that they cannot work.
Under California law, disability income insurance policies issued to California residents must include which of the following provisions?
Answer: An incontestable clause limiting the contest period to 2 years
California requires individual disability income policies to include a 2-year incontestable clause, after which the insurer cannot contest the validity of the policy except for fraud.