Illinois Health Insurance Practice Exam

What is a characteristic of most disability income policies regarding coordination?

1. Highly coordinating

2. Non-coordinating

3. Partially coordinating

4. Occasionally coordinating

The correct answer is: Non-coordinating

Most disability income policies are typically characterized as being non-coordinating, meaning they provide benefits independently of other income sources, such as Social Security or other disability benefits. This characteristic is crucial for policyholders because it ensures that the benefits received from their disability income policy can be received in full without being reduced by other sources of income. Non-coordinating policies offer a level of financial security by guaranteeing that the insured will receive the full amount of their policy benefits, providing reassurance in times of hardship caused by disability. This is particularly important for individuals relying solely on these benefits, as they may need the full capacity of their policy to cover living expenses and maintain their lifestyle during recovery.