57. An insured owns a disability income policy with a $1,000-per-month benefit. The contract contains a Recurring Disability provision and a one-month elimination period. If the insured is disabled for four months, a MAXIMUM benefit in which of the following amounts will be received?
Answer: A
The maximum benefit received will be $3,000.
The insured will receive a total of $3,000 after being disabled for four months, given the $1,000-per-month benefit and the one-month elimination period.
A) $3,000
This option is correct because the insured has a one-month elimination period, which means benefits start after the first month of disability. After the elimination period, the insured is eligible for three additional months of benefits, totaling $1,000 for each of those three months, which amounts to $3,000.
B) $3,500
This option is incorrect as it exceeds the calculated benefit. With the one-month elimination period, the insured is only eligible for benefits for three months, leading to a total of $3,000, not $3,500.
C) $4,000
This option is also incorrect. The insured cannot receive $4,000 because, after the one-month elimination period, they will only receive three months' worth of benefits at $1,000 each, which totals $3,000.
D) $4,500
This option is incorrect as well. The maximum benefit cannot reach $4,500 due to the elimination period stipulation. The insured is entitled to only three months of benefits post-elimination, leading to a maximum of $3,000.
Conclusion
The correct answer is definitively $3,000 because it accurately accounts for the one-month elimination period and the subsequent three months of benefits. All other options fail to consider the elimination period, resulting in incorrect total benefit calculations.