Chapter 6 Review


Special coverage disability policies are available for both business and non-business application.  Business application of specialty disability policies provide benefits to pay a business owner's overhead expenses, fund a disability buy-sell agreement and compensation an employer for the loss of a key person's services as a result of disability.

Non-business disability insurance may be used to provide non-occupational coverage, especially for individuals in high-risk occupations.  In addition, disability insurance is often used to provide debt protection -- especially in the case of a home mortgage.



Chapter 6  Review Questions


1. Which of the following is NOT normally an eligible overhead expense that is reimbursed in Overhead Expense policies?

Rent
Utilities
*Inventory
Office supplies


2. Which of the following would be typical Overhead Expense benefit periods?

12 months
24 months
60 months

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


3. Which of the following is a typical elimination period length in a disability buyout policy?

30 days
90 days
6 months
*24 months


4. How are disability buyout benefits paid?

In a lump-sum
In installments
*Either a or b
Neither a nor b


5. Which of the following roles does an employer NOT play in a Keyperson disability policy?

Owner
*Insured
Beneficiary
Premium payor