Which of the Following Holds True for Disability Insurance Plans

question 96

Multiple Choice

Which of the following holds true for disability insurance plans?

• A) They are purchased to replace lost income.
• B) Benefits are employer focused.
• C) Disability is expected to last for at least two years.
• D) They are purchased in order to supplement income.

---

Definitions:

Time Value of Money Concept

The principle that money available now is worth more than the same amount in the future due to its potential earning capacity.

Capital Investment Analysis

The process of evaluating and making decisions about capital expenditures or investments in projects that will have long-term implications for a business.

Net Present Value Method

A method used in capital budgeting to assess the profitability of an investment by calculating the present value of its expected cash flows minus the initial investment cost.

Average Rate of Return

A financial metric used to calculate the profitability of an investment, expressed as a percentage of the initial cost of the investment.