Disability Income✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A common limitation of limited-benefit disability policies is that they:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Limited-benefit disability and health policies pay the stated contract amount, for example, a daily hospital amount or a fixed monthly loan-payment benefit, regardless of the insured's actual economic loss. Because that fixed amount is usually modest relative to real income or medical costs, the coverage leaves significant gaps. This is the defining trade-off of limited products: predictable, inexpensive benefits in exchange for capped protection. Buyers should understand the limits so they can combine these policies with adequate comprehensive coverage.
Why the other options are wrong
- B) Reimbursing 100 percent of medical bills describes comprehensive major medical, not a limited-benefit policy.
- C) Limited-benefit policies cap both the benefit amount and the duration of payment; lifetime unlimited payment is not a limited-plan feature.
- D) Limited policies cover only their named triggers and contain exclusions; universal coverage without exclusions describes comprehensive plans.
Memory hook
Limited = fixed and capped. The check is predictable, and so is the shortfall.