Which of the following statements regarding benefits under private long-term disability income (PLTDI) plans is incorrect?

The statement that some private long-term disability income (PLTDI) plans can have no restrictions on coverage for preexisting conditions is incorrect because, in practice, most PLTDI plans impose some limitations regarding preexisting conditions. Insurers often include clauses that restrict benefits for disabilities related to conditions that existed prior to the start of coverage. These restrictions are designed to mitigate the risk for insurance companies, as they want to avoid covering pre-existing ailments that could lead to claims shortly after a policyholder begins a new insurance plan.

In contrast, the other options accurately reflect features of PLTDI plans. Some of these plans indeed offer lifetime benefits, which means that if the policyholder remains disabled, they can receive income replacement for the duration of their life. Additionally, many policies typically provide benefits until the insured reaches a certain age, often age 65 or the individual’s designated retirement age, aligning benefits with the expected working lifespan. Finally, it is common for some policies to specify a defined benefit period, such as two or five years, after which benefits will cease. Thus, the inclusion of preexisting condition exclusions is a standard practice in the industry, which clarifies why the choice regarding restrictions on preexisting conditions is not accurate.