An insured owns a disability income policy with a $1,000-per-month benefit. The contract contains a Recurring Disability provision and a one-month elimination period. If the insured is disabled for four months, a MAXIMUM benefit in which of the following amounts will be received?

Rationale

The insured will receive a maximum benefit of $3,000.

Given the one-month elimination period, the insured must be disabled for a total of five months (including the elimination period) to trigger the Recurring Disability provision. Since the insured is disabled for four months, they will receive a benefit for three months, totaling $1,000 per month, resulting in a maximum benefit of $3,000.

A ($3,000) CORRECT

Correct. The insured will receive $1,000 for each of the three months of disability after the elimination period, totaling $3,000.

B ($3,500) YOUR ANSWER

Incorrect. This amount is not the correct calculation based on the given policy details.

C ($4,000) YOUR ANSWER

Incorrect. This amount exceeds the total benefit payable considering the $1,000-per-month benefit for three months of disability.

D ($4,500) YOUR ANSWER

Incorrect. The maximum benefit payable, based on the policy details, is $3,000 and not $4,500.

Conclusion

The insured, under the disability income policy with a $1,000-per-month benefit, a one-month elimination period, and a Recurring Disability provision, will receive a maximum benefit of $3,000 if disabled for four months. This calculation accounts for the elimination period and the benefit amount per month during the disability period.

An insured owns a disability income policy with a $1,000-per-month benefit. The contract contains a Recurring Disability provision and a one-month elimination period. If the insured is disabled for four months, a MAXIMUM benefit in which of the following amounts will be received?

The insured will receive a maximum benefit of $3,000.

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