PART 4—-STUDY QUESTIONS

(Questions followed by [A] are answered in Part 5.)

1. How is AIDS communicable among humans?
(3–4)

2. How has the concentration of disability insurance coverage among specialized insurance companies affected the availability of disability-claims data?
(4)

3. According to table 2, what is the likelihood that at least one person out of a group of four persons aged 45 will sustain a 90-day disability before age 65? How do age and number of persons affect this risk? [A]
(5–6, 35)

4. What are the generally available sources of funds for disabled persons?
(6–8)

5. Why might individual disability income policies be more desirable than group coverage through an employer? [A]
(8–9)

 6. Describe the three types of disability definitions that can be found in individual disability policies.
(10–11)

 7. How do residual-disability benefits differ in concept from total-disability benefits?
(10–12)

8. What are the usual components of the fraction applied to the total-disability benefit amount to derive the residual-disability benefit amount? [A]
(11)

 9. What is the distinction between guaranteed renewable and noncancelable with respect to disability income policies?
(12)

 10. What factors usually influence the selection of the length of elimination period to be included in an individual disability income policy?
(13–15)

 11. Explain the pros and cons of having a relapse of disability classified as a new disability rather than as a continuation of a  previous disability.
(15)

12. Describe the various durations of benefit period from which purchasers of disability income policies can generally choose when making the purchase decision.
(15–17)

 13. What adjustment mechanisms can insurance companies apply to residual benefits with inflation protection when benefit eligibility continues uninterrupted for more than one year?
(19)

 14. How can the insured make sure that the benefit levels of disability income policies are kept in line with inflation while he or she is healthy and no benefits are being paid?
(20–21)

 15. Explain how disability policies usually deal with rehabilitation and organ donations for claims purposes.
(23–25)

16. Describe the nature of the social-security-rider option available with many disability income policies.
(25–26)

 17. Why do insurance companies limit the amount of potential disability benefits payable to less than the gross income of the insured, and how do they usually limit it?
(27–28)

 18. Describe the most common reasons why businesses purchase disability insurance on employees.
(30–34)