New York Insurance Exam Practice Question
What is the purpose of a waiting period in disability insurance?
Correct Answer: B
Rationale: A waiting period in disability insurance serves to delay benefit payments after a disability occurs. This period ensures that the insured has a temporary buffer before benefits kick in, which can help manage costs for the insurer.
Option A is incorrect as the waiting period does not pertain to premium payments but rather to when benefits are disbursed. Option C misinterprets the purpose; the waiting period does not limit claim filing time but is about when benefits start. Option D is also wrong since waiting periods do not influence a policy's cash value, which is determined by other factors.
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