Disability Income✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
How does the length of the benefit period affect the premium for a disability income policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The benefit period is the maximum length of time benefits are payable during a disability, commonly 1, 2, 5, or 10 years, or to age 65. A longer benefit period exposes the insurer to more potential claim payments, so the premium is higher. Choosing the benefit period is a major pricing decision along with the elimination period, the monthly benefit amount, and the definition of disability. Shorter benefit periods lower the premium because the insurer's maximum exposure is capped sooner, and the savings can be meaningful.
Why the other options are wrong
- B) Waiting before benefits begin is the elimination period, not the benefit period; a longer benefit period increases, not decreases, cost.
- C) The benefit period is one of the principal rating factors in disability income insurance, along with the elimination period and benefit amount.
- D) Tax treatment depends on who paid the premiums, not on the length of the benefit period.
Memory hook
Benefit period = how long the checks can flow. Longer flow, higher premium.