Disability

Question 1

What is a benefit of having an own occupation disability policy?

Answer 1

You could still work in another occupation, but still get paid by the disability policy because you can’t do your own occupation

Question 2

Describe an any occupation disability policy. What is it also known as?

Answer 2

Insured is unable to engage in any occupation he/she is qualified by reason of training, education, or experience.

Modified own occupation

Question 3

At what age do disability benefits typically end?

Answer 3

65 or whatever is written in the contract

Question 4

What are the disability income policy continuance provisions?

Answer 4

Non-cancelable (noncan)
Guarantee renewable

Question 5

For exam purposes, can we take a client from own occupation to any occupation coverage?

Answer 5

No

Question 6

What are disability riders?

Answer 6

Residual benefits rider

Partial disability rider

Disability waiver of premium provision

Question 7

What does the residual benefit benefits writer to detail?

Answer 7

Benefits are proportionate to the amount of income loss and payable the same duration as total disability

Question 8

What is the partial disability rider?

Answer 8

Usually 50% of the total disability benefit, max. Is less than six months.

Question 9

Could a group disability policy have the disability, waiver, premium provision?

Answer 9

No

Question 10

When would the social insurance substitute benefit SIS be paid?

Answer 10

When trying to get Social Security benefits for the disability

Question 11

If an individual owns the disability contract and pays the premium, what are the tax implications?

Answer 11

Premiums are not deductible

Premiums are paid with after tax dollars

Benefits are tax-free to the individual

Question 12

In what situation would an employee earn a disability contract but the employer pay the entire premium?

Answer 12

Section 162 disability insurance under a bonus arrangement

Question 13

Under a section 162, what are the tax ramifications?

Answer 13

Premiums are deductible by the employer as a bonus

Premiums are paid with AFTER tax dollars

Benefits are tax-free to the employee since employee was charged taxes on the premiums under the bonus plan

Question 14

If an employee owns a disability contract, and the employer pays the entire premium under a salary continuation plan, what are the tax implications?

Answer 14

Premiums are deductible by the employer

Premiums are paid with pre tax dollars

Benefits are taxable to the employee because the employer paid the premiums with pre-tax dollars

Question 15

In what situation could a partnership or S corporation DEDUCT the premiums paid for disability coverage?

Answer 15

When coverage is for a partner or a greater than 2% shareholder of an S corporation

Question 16

How are the benefits received to a partner or S corporation 2% or greater owner?

Answer 16

Premium costs included in taxable income of partner, or shareholder therefore benefits are tax free

Question 17

In regard to long-term care insurance for an individual when can premiums paid and on reimbursed expenses be deductible?

Answer 17

When expenses are for QUALIFIED long-term care services

Medical expenses are itemized

Question 18

What is the max deduction for long-term care insurance?

Answer 18

Depend depends on age

51-60 - $1,800
61-70 - $4,810