When issuing disability income coverage on a substandard risk, an insurer may

• A. Lengthen the Benefit Period
• B. Shorten the Benefit Period
• C. Deny Coverage
• D. Increase Premiums

Answer: (B)

When underwriting disability income coverage for a substandard risk, the insurer adjusts terms to balance the higher chance of a claim with keeping coverage available. A key way to do this is by shortening the benefit period—the time benefits are paid if disability occurs. By reducing how long benefits can be received, the insurer lowers its total exposure while still providing protection to the insured.

Other adjustments exist, such as charging higher premiums or increasing the elimination period, or in some cases declining coverage. But shortening the benefit period is the straightforward method that directly limits potential payout and is commonly used when risk is elevated.