Which group of factors is most commonly used to rate a disability income application?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Disability income rating focuses on the factors most predictive of the likelihood and duration of disability: age, because morbidity rises with age; gender, because disability patterns differ between men and women; occupation, the single most important class factor; avocations, such as hazardous sports, which increase accident risk; and health history, including chronic conditions and prior claims. These factors are used to classify the applicant into a premium tier, and they are the rating elements listed in the exam objectives for disability income insurance.
Why the other options are wrong
- B) Race and marital status are prohibited as rating factors; credit score is not a standard disability rating input.
- C) Home value, car model, and travel frequency do not measure disability risk.
- D) Investment portfolio and educational background are not standard disability rating factors.
Memory hook
Age plus gender plus occupation plus hobbies plus health = the five dials disability underwriters turn.