The correct answer is: A. If the insured dies within three years of policy duration.
An early death claim is a life insurance claim that is made before the insured person reaches the age of 100. In most cases, early death claims are paid out at a reduced rate. This is because the insurance company has a higher risk of having to pay out a claim if the insured person dies young.
The three-year rule is a common rule used by insurance companies to determine whether a death claim is an early death claim. Under this rule, any death claim that is made within three years of the policy starting date will be considered an early death claim.
There are a few reasons why insurance companies use the three-year rule. First, it helps to protect the insurance company from high-risk policyholders. Second, it encourages people to keep their life insurance policies for the long term. Third, it helps to keep premiums affordable for everyone.
If you are considering purchasing a life insurance policy, it is important to understand the three-year rule and how it may affect your coverage. You should also talk to your insurance agent about other options that may be available to you, such as a policy with a longer waiting period.