How does the applicant's age typically affect the premium for a disability income policy?

Why A is correct

Age is a core rating factor in disability income underwriting because morbidity risk increases with age: older insureds are more likely to become disabled and, once disabled, tend to remain disabled longer. An applicant applying at age 50 pays a higher premium than the same applicant at age 35, all else equal, because the expected claim cost is higher. Age also interacts with the benefit period; the cost of a benefit period running to age 65 rises for older applicants because fewer working years remain and full-period benefits become relatively more expensive.

Why the other options are wrong

• B) Disability risk increases with age: older insureds are more likely to become disabled and to remain disabled longer. Because expected claim cost is higher, premiums rise with age rather than falling.
• C) Age is one of the core rating factors in disability underwriting, alongside gender, occupation, avocations, and health. It materially affects the premium an applicant is charged, so it cannot be ignored in rate making.
• D) Age affects premium pricing directly through the probability of loss. The benefit amount is a separate design choice the applicant elects; it is not where the effect of age is expressed.

Memory hook

Older age = higher disability premium; risk grows as birthdays pass.