Disability & Long-Term CareQuestion 83 of 315
An insured selects a 180-day elimination period instead of a 30-day elimination period. What is the effect on the premium?
a.The premium is unchanged; the elimination period does not affect cost
b.The premium decreases only if the benefit period is also shortened
c.The premium decreases because the insurer's exposure is reduced
d.The premium increases because benefits will be paid longer
Explanation
The elimination period is the waiting time before benefits begin. A longer elimination period means the insurer pays for fewer disability claims and pays each one later, which reduces the insurer's overall exposure and lowers the premium.
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Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)