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?

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

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?

Premium payor