Question 1

Which of the following is True about the chances of becoming disabled?

Accepted Answer

The answer of Which of the following is True about...

Question 2

Which of the following is True about disability insurance?

Accepted Answer

Becoming disabled could lead to loss of income and increased medical expenses, making it more financially devastating than losing your home. It's important to consider disability insurance coverage to protect against such situations. Option A is not necessarily true for everyone, as emergency funds may not be sufficient for a long-term disability. Option B depends on the specific plan provided by the employer, which may not be sufficient. Option C is a common misconception as young people may also experience disabilities that prevent them from working.

Question 3

Which of the following is correct regarding long-term care insurance?

Accepted Answer

Long-term care insurance typically has an elimination period, which is a waiting period before coverage kicks in. This is usually a set number of days during which the policy owner is responsible for paying for their own long-term care costs.

Question 4

As of 2012,which was True about life and health insurance in Canada?

Accepted Answer

In 2012, more Canadians had extended health insurance compared to disability insurance, reflecting the broader coverage and availability of extended health benefits.

Question 5

In comparing term insurance with mortgage life insurance,which of the following is True?

Accepted Answer

Term insurance allows the owner to choose the beneficiary and has no restrictions on how the death benefit is used, providing the owner with more control. Mortgage insurance is usually designed to pay off the mortgage balance if the borrower dies and the premiums remain the same throughout the life of the policy because the policy provides a decreasing benefit. Additionally, mortgage insurance is tied to the mortgage and the lender is the beneficiary, limiting the owner's control.

Question 6

The similarity between disability income and long-term care insurance is

Accepted Answer

Both disability income and long-term care insurance have a waiting period before benefits are paid out. Disability income insurance typically has a shorter waiting period of a few weeks to a few months, while long-term care insurance has a waiting period of several months to a year or more. Both types of insurance also require proof of the insured's need for benefits, but they do not necessarily require proof of income. Disability income insurance provides a regular income to replace lost income due to a covered disability, while long-term care insurance provides benefits to cover the costs of long-term care services such as nursing home care or home health care. Neither type of insurance typically provides a death benefit, and while they can both extend benefits beyond age 65, this is not a defining similarity between the two.

Question 7

A disadvantage of term insurance is

Accepted Answer

D  Term insurance premiums increase with age, making it more expensive upon renewal. Additionally, if the insured develops a life-threatening illness, the policy might not be renewable.

Question 8

What would be the out-of-pocket cost to an individual whose long-term care policy includes a 20 percent co-insurance clause? A current long-term illness has resulted in total expenses of $250 000.

Accepted Answer

If the policy includes a 20% co-insurance clause, the individual would be responsible for paying 20% of the total expenses, which would be $50,000 (20% of $250,000). Therefore, the out-of-pocket cost would be $50,000.

Question 9

If Tom is a technology consultant and wants to purchase reliable long-term disability insurance coverage that is cost effective for him,which would be the best choice?

Accepted Answer

The answer of If Tom is a technology consultant and...

Question 10

An individual covered by disability insurance who has recently recovered and is returning to work after receiving benefits would be most concerned with

Accepted Answer

The answer of An individual covered by disability insurance who...

Question 11

Regarding the definition of "disability,"

Accepted Answer

The definition of "disability" indeed varies significantly across different disability insurance policies, making it a crucial factor to consider when evaluating or choosing a policy. This definition determines under what circumstances an insured individual would be eligible to receive disability benefits.

Question 12

Which of the following types of life insurance has a cash value component?

Accepted Answer

Whole life insurance has a cash value component, which means that part of the premium paid is invested and can grow in value over time. This cash value can be borrowed against or used to pay premiums in the future. Term life, dependant life, and mortgage insurance do not have a cash value component.

Question 13

If John's business had purchased disability insurance coverage for its employees which was guaranteed renewable,which of the following is True?

Accepted Answer

Guaranteed renewable disability insurance means that the insurance company must renew the coverage with the same benefits, but they may increase the premiums. They cannot decrease the coverage or change the definition of disability used.

Question 14

Which of the following statements is True regarding disability insurance?

Accepted Answer

The principle of indemnification ensures that insurance coverage does not exceed the actual financial loss, limiting the amount of disability insurance one can obtain.

Question 15

Which of the following would be of little concern when calculating the amount of disability insurance needed?

Accepted Answer

The answer of Which of the following would be of...

Question 16

Individual health insurance plans

Accepted Answer

Individual health insurance plans are purchased directly through agents or insurance companies, rather than being offered through an employer. They provide coverage for individuals who don't have access to group plans, such as self-employed individuals or those who work part-time.

Question 17

Critical illness insurance

Accepted Answer

Critical illness insurance pays a lump sum if you survive a life-altering illness listed in the policy for at least 30 days. It does not reimburse treatment expenses like regular health insurance, and it is not always offered in employee group insurance plans. Additionally, the payout is not based on evidence from a physician but rather on the diagnosis of a life-altering illness outlined in the policy. Therefore, the best choice is letter C.

Question 18

Employee group health insurance policies do not commonly offer

Accepted Answer

Critical illness insurance is not commonly offered by employee group health insurance policies.

Question 19

You are putting $300 per month into a savings account to pay for your child's post-secondary education.You worry that if you die before you get enough saved,your child will not be able to get a good education.Which of the following types of life insurance would best fit your needs at the lowest cost?

Accepted Answer

Term life insurance is the best choice for this scenario because it provides coverage for a specific time period and is generally more affordable than other types of life insurance. You can choose a term length that aligns with the length of time you plan to save for your child's education. If you were to pass away during this time period, the death benefit could be used to fund your child's education.

Question 20

Which of the following is True regarding employer sponsored long-term disability insurance?

Accepted Answer

Most employer-sponsored long-term disability insurance plans use the 'any occupation' definition after two years, meaning benefits continue only if the employee is unable to work in any occupation for which they are reasonably suited by education, training, or experience.

Quiz 9: Protecting Your Wealth - Health and Life Insurance