What is the benefit amount for open-end loans as per disability coverage?

The benefit amount for open-end loans as per disability coverage is determined by the outstanding balance on the date of disability. This means that if a borrower becomes disabled and is unable to make payments, the insurer will cover the amount that the borrower owes at that specific time. This approach is designed to prevent borrowers from being overinsured, as it directly ties the benefit to their current financial obligation rather than a total loan amount or a predetermined fixed benefit.

The outstanding balance is important as it reflects the actual risk being covered by the insurance, ensuring that the borrower receives the necessary support without any excess funds that would not be relevant to their situation. This method aligns with the principle of providing benefits according to the borrower's needs at the time of the disability rather than an arbitrary fixed sum or rate.