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Regarding disability income policies, which of the following benefit periods would have the lowest premium?

A. 6 weeks
B. 6 months
C. 2 years
D. 1 year

1 Answer

4 votes

Final answer:

The disability income policy with a 6-week benefit period would have the lowest premium because shorter benefit periods come with lower risk and thus lower premiums for the insurance provider.

Step-by-step explanation:

Regarding disability income policies, the benefit period with the lowest premium would be A. 6 weeks. The premium of a disability income policy is closely tied to the length of the benefit period, with shorter durations generally commanding lower premiums.

This is because the risk exposure for the insurance provider decreases as the benefit period becomes shorter. Hence, disability policies with a 6-week benefit period are less expensive than those with longer durations such as 6 months, 1 year, or 2 years.

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User Jrotello
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