South Carolina Insurance Practice Exam

The option that results in the highest premium is associated with having no waiting period and a lifetime benefit. Choosing a policy with a lifetime benefit ensures that the insured will receive benefits for as long as they are disabled, which is a significant risk to the insurer. A shorter waiting period, combined with a longer benefit period, increases the likelihood of the insurer having to pay benefits more frequently and for a longer duration, thus raising the overall premium.

In this scenario, having no waiting period means the insured can begin receiving benefits immediately after a qualifying event, creating a higher risk for the insurer. When this is combined with a lifetime benefit, the insurer faces potential long-term payouts without any delay, making it a costly option.

Thus, the combination of immediate coverage with lifetime payout encourages higher premium rates to mitigate the insurer's risk. The other options involve longer waiting periods or shorter benefit durations, which reduce the insurer's risk exposure and generally result in lower premiums.