AD Banker Comprehensive Practice Exam

Which type of disability income policies typically cover only nonoccupational disabilities?

1. Workers' Compensation

2. Long-term disability policies

3. Disability income riders

4. Short-term disability policies

The correct answer is: Workers' Compensation

The correct choice relates to the nature of workers’ compensation policies, which are designed specifically to cover disabilities arising from work-related injuries or occupational diseases. In contrast, workers’ compensation focuses solely on job-related impairments and does not address nonoccupational disabilities. Long-term disability policies generally provide coverage for both occupational and nonoccupational disabilities, allowing individuals to receive benefits for a broader range of conditions that prevent them from working. Similarly, short-term disability policies also tend to cover both types of disabilities, offering temporary income replacement for a variety of circumstances not limited to occupational causes. Disability income riders are typically add-ons to other insurance policies and can provide coverage for a wide range of disabilities without restricting to just nonoccupational conditions. The focus on nonoccupational disabilities effectively excludes coverage for work-related incidents, which is why workers’ compensation is distinct in its purpose and scope compared to the other options provided.