AD Banker Comprehensive Practice Exam

How do group disability income policies typically compare to individual disability income policies?

1. More costly and less liberal provisions

2. Less costly and are more heavily underwritten

3. Written on an occupational basis only

4. Less costly and have more liberal provisions

The correct answer is: More costly and less liberal provisions

Group disability income policies are typically less costly than individual disability income policies and include more liberal provisions for coverage. This can be attributed to the pooling of risk among many individuals in a group policy, which often results in lower premiums and more inclusive benefits. While individual policies require thorough underwriting and are tailored to each person's specific needs and occupations, group policies often do not require extensive medical underwriting. This can make them more accessible, ensuring that a broader range of individuals can obtain coverage without strict limitations related to their health status. Conversely, the provisions in group policies may vary; while they provide essential benefits, they may not cover as wide a range of scenarios or offer the same level of customization as individual policies. Thus, individuals covered under group disability income plans might find limitations in terms of how benefits are structured or the scope of what is covered compared to what might be available in an individual policy tailored to their unique situation.