Ian applies for an individual disability insurance (DI) policy with a return of premium (ROP) rider. During
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Question:
Ian applies for an individual disability insurance (DI) policy with a return of premium (ROP) rider. During the application process, the insurer determines that Ian is overweight. After the underwriting process, the insurer issues a policy with a rating due to Ian’s weight issue. Which of the following provides a CORRECT description what will happen under Ian's disability insurance policy?
a) | Any amounts received by Ian as a return of premium will be tax-free. | |
b) | If Ian suffers a disability related to his weight, no benefits will be payable. | |
c) | Ian will receive a return of premium if the total claims exceed the premiums paid. | |
d) | The premiums that Ian pays will be tax-deductible. |
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