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Harper owns a disability insurance policy that will pay her a monthly benefit if she...

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Harper owns a disability insurance policy that will pay her a monthly benefit if she becomes unable to work. At the time she applied for the policy, Harper was a new graduate with an annual income of $60,000, and she qualified for a monthly benefit of $3,000. Instead of taking the maximum benefit, she focused on paying off her student loans and keeping her insurance premiums low. She elected to purchase a monthly benefit of $2,500 and add the future purchase option (FPO) rider for up to $500 a month of additional coverage. Now she is further along in her career, Harper earns $100,000 a year, and she meets with her insurance agent Trish to increase her coverage. Harper would like her new monthly benefit to be $5,000.

Which of the following statements about Harper’s coverage is TRUE?

A.

If Harper wants to increase her coverage, she will have to apply for an additional $2,500 of monthly benefit with full medical underwriting.

B.

Harper cannot apply to receive an additional $2,000 of coverage, but she can exercise the FPO and increase her monthly benefit by $500.

C.

Harper can exercise the FPO and increase her monthly benefit by $2,500.

D.

Harper can exercise the FPO, increase her monthly benefit by $500, and apply for an additional $2,000 of monthly benefit with full medical underwriting.

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