Lori, age 28, is a registered nurse who earns $4,000 monthly working in a hospital. She is seriously injured in an auto accident in which she is at fault and is expected to be unable to work for at least one year. She has a guaranteed renewable disability-income policy that pays $2,800 monthly up to age 65 for accidents and sickness after a 90-day elimination period. A residual disability benefit is included in the policy. Loris policy contains the following provisions:

Total disability means (a) your inability during the first 24 months to perform substantially all the important duties of your occupation, and you are not working at any gainful occupation; (b) after the first 24 months that benefits are payable, it means your inability to engage in any gainful occupation.

Gainful occupation means any occupation or employment for wage or profit that is reasonably consistent with your education, training, and experience.

Given these provisions, answer the following:

A. If Lori is off work for one year because of the accident, indicate the extent, if any, of the insurers obligation to pay disability benefits.

B. Assume that Lori is disabled for one year, recovers, and returns to work part-time. If she earns $2,000 monthly after returning to work, indicate the extent, if any, of the insurers obligation to pay her disability benefits.

C. Assume that after two years, Lori is unable to return to work as a full-time hospital nurse. A drug manufacturer offers her a job as a lab technician, which she accepts. Indicate the extent, if any, of the insurers obligation to continue paying her disability benefits.

D. Following the accident, could Loris insurer cancel her policy or increase her premiums? Explain your answer.