Accident & Sickness: Other Insurance Concepts Flashcard

Front

Total Disability

Back

Unable to perform job duties.

Answer explanation

'Total Disability' in insurance means the insured is unable to perform job duties. This definition emphasizes complete incapacity to work, distinguishing it from partial disabilities or other conditions.

Front

Which type of disability is characterized by the ability to perform some job duties with reduced benefits?

Back

Partial Disability

Answer explanation

Partial Disability refers to a condition where an individual can still perform some job duties but may not be able to work at full capacity, often resulting in reduced benefits compared to total disability.

Front

What is the primary characteristic of 'Recurrent Disability'?

Back

Same disability returns; treated as continuation.

Answer explanation

The primary characteristic of 'Recurrent Disability' is that the same disability returns and is treated as a continuation of the previous condition, rather than being considered a new disability.

Front

In the context of insurance, what does 'Residual Disability' focus on?

Back

Loss of income, not total inability.

Answer explanation

'Residual Disability' focuses on loss of income rather than total inability to work. It recognizes that an individual may still be able to perform some work but at a reduced capacity, impacting their earnings.

Front

Who has the right to change the beneficiary in an insurance policy?

Back

The policyowner

Answer explanation

The policyowner has the right to change the beneficiary in an insurance policy, as they hold the ownership and control over the policy. The insured, beneficiary, and insurance company do not have this authority.

Front

What is the typical coverage for dependent children under an insurance policy?

Back

Coverage often to a set age or status, like full-time student

Answer explanation

Dependent children are typically covered under insurance policies until a certain age or status, such as being a full-time student, rather than just until age 18 or 21. This allows for continued coverage during education.

Front

Who receives the benefits first in the case of a primary and contingent beneficiary setup?

Back

The primary beneficiary

Answer explanation

In a primary and contingent beneficiary setup, the primary beneficiary receives the benefits first. If the primary beneficiary is unavailable, then the contingent beneficiary would receive the benefits.

Front

What is the advantage of choosing an annual mode of premium payment?

Back

Lower service fees

Answer explanation

Choosing an annual mode of premium payment typically results in lower service fees compared to more frequent payments, as insurers often reward customers for committing to a longer payment term.

Front

What is the purpose of nonduplication and coordination of benefits?

Back

To prevent overpayment when multiple policies apply

Answer explanation

The purpose of nonduplication and coordination of benefits is to prevent overpayment when multiple policies apply, ensuring that the total benefits do not exceed the actual expenses incurred.

Front

What type of policy excludes work-related claims?

Back

Nonoccupational policy

Answer explanation

A nonoccupational policy specifically excludes work-related claims, covering only personal injuries or illnesses that occur outside of the workplace. This distinguishes it from occupational policies, which cover work-related incidents.