What is the purpose of a disability reducing term?
A)Provide reducing term coverage for business owners
B)Provide reducing premium coverage for businesses
C)Provide monthly benefits to cover monthly financial obligations
D)Provide monthly benefits to cover monthly medical expenses during disability

Question

Quizplus · Accepted Answer

The purpose of a disability reducing term is to provide monthly benefits to cover monthly financial obligations of the business while the owner is disabled. These benefits will cover the monthly payments until the financial obligation is satisfied. Under this coverage, the business purchases the policy which it then owns. The business owner is the insured individual, and the business is the beneficiary to receive the monthly benefit payments. The part "reducing term" means that monthly benefits are payable only for the remaining indebtedness or obligation and they are then considered complete.

What Is the Purpose of a Disability Reducing Term