A&S Underwriting, Taxation & Claims question: individual disability policy

A&SUnderwriting, Taxation & Claims

Marcus, 38, a sales representative in Mississauga earning $60,000 a year, applies for an individual disability policy and asks for a $6,000 monthly benefit because he wants 'room to spare'. He has no other disability coverage and is in excellent health. What will financial underwriting most likely do?

A Approve it if he passes the medical exam
B Approve it with a longer elimination period
C Approve it at a rated premium
D Limit the benefit to a share of income

Show the answer and explanation

Answer: D. Limit the benefit to a share of income

Financial underwriting checks that the benefit is reasonable relative to earned income, using issue and participation limits, so the insured is not better off disabled than working. $6,000 a month is more than his total monthly income of $5,000. Source: CISRO LLQP Curriculum (May 2015), Accident and Sickness module, component 3.1 (underwriting criteria) and standard Canadian A&S underwriting practice (as at 12 Oct 2026).

Common mistake

Thinking medical underwriting alone sets the benefit.

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Original study material mapped to the public CISRO curriculum; not a real test question.Not affiliated with CISRO, CCIR or any provincial insurance regulator. Verify figures and rules against current guidance before relying on them.