Arizona Life and Health Practice Exam

Which of the following is NOT a common characteristic of disability insurance?

1. Provides income for a set period of time

2. Covers all illnesses and accidents

3. Has a waiting period before benefits start

4. May require evidence of insurability

The correct answer is: Covers all illnesses and accidents

Disability insurance is designed to provide financial support to individuals who cannot work due to a disabling condition. However, it is not guaranteed to cover all illnesses and accidents, which is why the assertion that it covers everything is not accurate. Typically, disability insurance policies may have exclusions for certain types of conditions, such as pre-existing conditions or specific disabilities that are outlined in the policy. The other characteristics listed are indeed common features of disability insurance. For instance, providing income for a set period of time is a fundamental aspect, as the insurance replaces lost income when a person is unable to work. A waiting period, or elimination period, is also standard practice in disability insurance, where the insured must wait a specified time after the disability begins before they start receiving benefits. Furthermore, many policies may require proof of insurability, which involves the applicant providing health information to assess risk before coverage is granted. Understanding these characteristics is crucial for making informed decisions regarding disability insurance, as this knowledge helps individuals anticipate their coverage and its limitations.