Which of the Following Is True Regarding Disability Insurance

question 11

Multiple Choice

Which of the following is true regarding disability insurance?

• A)Disability insurance is usually provided as a stand-alone policy.
• B)The most common disability coverage pays specific fixed costs of the business in the event that the owner or other named key person becomes disabled.
• C)Buyout insurance provides funds to the business to purchase the ownership position of a disabled partner.
• D)It is the most highly desired form of insurance for most employees.

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Definitions:

Equilibrium Interest

The interest rate at which the quantity of loanable funds demanded equals the quantity supplied, balancing savings and borrowing.

Loanable Funds

The money available for borrowing in the financial markets, influenced by interest rates and economic conditions.

Useful Life

The period during which an asset is expected to be usable for its intended purpose.

Interest Rate

The cost of borrowing money or the return on invested capital, typically expressed as a percentage of the principal amount per period.