CMFAS HI Disability Income & Long-Term Care question: Disability Income Insurance premium

CMFAS HIDisability Income & Long-Term Care

Which combination of policy choices would result in the LOWEST Disability Income Insurance premium, all else being equal?

A A shorter deferred period combined with a longer benefit period
B A longer deferred period combined with a shorter benefit period
C A shorter deferred period combined with a shorter benefit period
D A longer deferred period combined with a longer benefit period

Show the answer and explanation

Answer: B. A longer deferred period combined with a shorter benefit period

A longer deferred period filters out short-term claims (cheaper premium), and a shorter benefit period reduces the insurer's maximum payout duration (also cheaper). Combining both gives the lowest premium.

Common mistake

Longer deferred period AND shorter benefit period both cut premiums; mixing in a shorter deferred or longer benefit period raises the cost.

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Study note: Disability Income & Long-Term Care CMFAS HIpractice questions & mock exams

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Original study material mapped to the public CMFAS HI syllabus. Unofficial, not endorsed by MAS or SCI. Verify figures and rules against current guidance before relying on them.