Which of the Following Changes Would Tend to Increase the Premium

question 140

Multiple Choice

Which of the following changes would tend to increase the premium on a disability policy:

• A) a shorter elimination period
• B) use of "any occupation" definition of disability instead of "own occupation to which one is reasonably suited."
• C) decreasing the benefit level from 50% to 66% of prior earnings.
• D) decreasing the payment period from until age 65 to a maximum of 2 years.
• E) none of the above would tend to increase the premium.

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Definitions:

Post-closing Trial Balance

A list of all balances remaining in an organization's accounts after the closing entries have been made, serving as a check to ensure that debits equal credits.

Post-closing Trial Balance

A financial statement prepared after closing entries are made, listing only the balance sheet accounts with non-zero balances.

Ledger

A principal book or computer file for recording and totaling economic transactions measured in terms of a monetary unit of account by account type.

Income Summary

An account in the ledger used to summarize revenues and expenses for a specific period before transferring the net result to capital accounts.