Final answer:
Group disability income plans are insurance policies that provide income replacement to employees who are unable to work due to disability. They have various characteristics, including premium payment options, coverage duration, and benefit calculation. Therefore, the answer is C.
Step-by-step explanation:
Group disability income plans are insurance policies that provide income replacement to employees who are unable to work due to disability. They are typically offered by employers as part of their employee benefits package.
Now, let's go through each option to see which one is not a characteristic of group disability income plans:
- A. Premiums are paid based on a contributory or noncontributory basis. This is true, as contributory means employees share the cost of premiums and noncontributory means the employer pays the entire premium.
- B. Coverage can be offered based on short-term or long-term disability benefits. This is true, as group disability income plans can provide coverage for both short-term and long-term disabilities.
- C. Issued as nonoccupational. This is false. Group disability income plans can be issued as either occupational or nonoccupational, depending on the nature of the disability.
- D. Benefits are based on a percentage of the employee's income at the time the policy was issued. This is true, as the benefits provided by group disability income plans are typically a percentage of the employee's pre-disability income.
Therefore, the answer is C. Issued as nonoccupational.