AD Banker Comprehensive Practice Exam

Which of the following could influence the amount of a disability income rider benefit?

1. The insured's income level

2. The age of the insured at policy issue

3. The duration of the policy

4. The health status at the time of the claim

The correct answer is: The insured's income level

The amount of a disability income rider benefit is primarily influenced by the insured's income level. This connection exists because disability insurance is designed to replace a portion of the insured's lost income if they become disabled and are unable to work. Insurers typically calculate the benefit amount based on a percentage of the insured's pre-disability earnings, which means that higher income levels will generally result in higher benefit amounts. The insured's age at policy issue could impact underwriting decisions and the premium rates but does not directly affect the benefit amount they might receive in the event of a disability. Similarly, the duration of the policy primarily pertains to how long benefits would be paid rather than how much those benefits would be. Health status at the time of the claim is more relevant to whether the claim will be paid or not, rather than determining the amount of benefit received.