Final answer:
In short-term disability policies, Pregnancy is a common exclusion. Other conditions like cancer, accidents, and heart attacks are usually covered since they are not seen as predictable.
Step-by-step explanation:
One common exclusion for short-term disability policies is A. Pregnancy. This restriction is often in place because insurers aim to manage their risk and avoid covering conditions that are seen as predictable or within the control of the insuree. Short-term disability insurance is designed to protect income for employees who are temporarily unable to work due to illness or injury. Conditions like cancer, accidents, and heart attacks are typically covered because they are unpredictable and can strike any individual without warning. On the other hand, pregnancy is generally a planned event and therefore is excluded from many short-term disability plans. Adverse selection is a significant issue in insurance markets, where individuals with underlying medical conditions are more likely to purchase insurance, thus potentially raising the cost for everyone.