Criteria for a short duration:

• A. Provides protection for a fixed period of short duration
• B. Allows the insurer to cancel or change the provisions
• C. Both statements are true
• D. Neither statement is true

Answer: (C)

Short duration contracts are defined by two practical features: coverage that lasts for a defined, limited period, and terms that can be altered or canceled by the insurer. Because the coverage is limited to a fixed time frame, you’re protected only for that short window, after which the policy ends unless renewed or replaced. At the same time, these contracts don’t carry the same guaranteed, long‑term commitments as many longer-duration policies, so the insurer often retains the ability to cancel or change provisions—such as at renewal or for reasons like nonpayment or misrepresentation. This combination—a fixed, short protection period and insurer flexibility to cancel or modify terms—makes both statements true for short-duration contracts.