Chapter 1 Review

For many people, disability is the forgotten hazard -- despite its being far more likely at most ages before retirement than death.  Although the chances of becoming disabled are greater for someone with a history of health problems, age, occupation and lifestyle also impact the likelihood of disability.  If the disability statistics for any individual are sobering, the same statistics when applied to a group of individuals are even more so.  As the size of any group increases, the likelihood of a long-term disability among members of the group also increases.  As the group size becomes larger, the chance of a disability becomes almost 100%.  

After considering the alternative income sources during disability -- savings, borrowing or spousal employment -- the only obvious answer is disability income insurance.



Chapter 1 Review Questions

True or False

1.  At most ages, the likelihood of disability is about the same as the likelihood of death.

True
*False

2.  How many disabilities are likely to occur by age 65 in a group of 10 men, all of whom are age 40?

One
*Three
Four
Five

3.  Which of the following affect the likelihood of any individual's becoming disabled?

I.   Age
II.  Occupation
III.  Lifestyle

I & II only
I & III only
II & III only
*I, II & III


4.  Which of the following is/are affected by a prospective disability insurance applicant's occupation?

The cost of disability coverage
The quality of disability coverage
*Both a and b
Neither a nor b


5.  Which of the following would NOT normally be considered a part of a disability insurance applicant's lifestyle?

Smoking habits
Avocation
*Occupation
Drinking habits