Chapter 5 Riders

A long-term care rider is a type of:

Accelerated benefit

Which rider allows the policyowner to purchase additional amounts of whole life insurance at certain points in the future?

Guaranteed insurability rider

The return of premium rider is sometimes thought of as a safety net for your safety net. If the insured outlives the term policy, the insurance company returns all or some of your premium payments. All of the following are considered drawbacks of this type of rider, EXCEPT:

If the insured dies, the beneficiaries receive a lump sum death benefit

Under what conditions will the waiver of premium rider pay benefits?

If the insured is totally and permanently disabled

Which of the following explanations best describes the purpose of the waiver of premium provision of a life insurance policy?

It waives the insured's premiums if the insured is totally disabled before a specified age.

Some riders can affect the death benefit of a life insurance policy. Which of the following riders can decrease the death benefit?

Long-term care rider

Of the following life insurance policy riders, which does not alter the amount of the death benefit?

Payor

Jacqueline has purchased life insurance policies for her sons, ages 10 and 14. Which of the following riders can she purchase to waive the premiums on her son's policies if she were to become disabled?

Payor rider

Of the following, which is not a term rider?

Variable income rider

Which of the following is not a life insurance rider that affects the policy's death benefit?

Waiver of cost of insurance

Abe has a $200,000 whole life insurance policy with double indemnity from an AD&D rider. If Abe dies from cancer, how much will his beneficiary receive?

$200,000

The appropriate rider allows premium payments to be waived in the event of disability. What is the normal waiting period for premiums to be waived?

60 days

The principal sum of a AD&D rider attached to a life insurance policy pays:

A principal sum if the insured loses both arms

The face amount of the substitute insured rider remains the same for a new employee. The premium however, will be refigured. ______ and ________ are both required in order for the premium to be refigured for the new employee

Age, health

Which life insurance rider affecting the policy's death benefit protects against the chance of depleting income during prolonged life?

Annuity rider

Another term that means rider is:

Endorsement

Which rider allows the named insured to be changed in a life insurance policy?

Exchange privilege rider

The appropriate rider allows premium payments to be waived in the event of disability. What is the normal waiting period for premiums to be waived? Select one:

More insurance coverage at specified points in the future, without proof of insurability

All of the following statements are true about the accidental death benefit (ADB), EXCEPT:

The amount paid is one half of the face amount of the life insurance policy.

Jon's life insurance policy contains a disability income benefit that will pay him a periodic income in the event he becomes disabled. What factor determines the amount of the benefit?

The face amount of the policy

Jill and Jessie are debating whether to add certain riders to their life insurance policy. What is the main benefit of the guaranteed insurability rider (GIR) on a policy?

The insured in not required to provide proof of insurability when the option is exercised.

The accelerated benefit rider is also called a living benefit rider. Which of the following is true about the accelerated benefit rider?

The insured must have a terminal illness to receive the benefit, Confinement in a nursing home sometimes suffices for payments to be made & The benefit is not subject to tax

If an insured opts to use the accelerated death benefit on their life insurance policy, what is the net effect on the face value of the policy?

The policy face value will be lowered based on the accelerated amount paid.

Riders covering additional insureds can be added to life policies. A popular rider is the children's term rider. All of the following can be covered by the children's term rider, EXCEPT:

Younger siblings of the policyholder

Julie has been disabled for three years. The insurance company has waived $4,000 worth of premiums on her $100,000 life insurance policy. If Julie dies, how much will her beneficiary receive?

$100,000

All of the following statements are true regarding the waiver of premium rider for a life insurance policy, EXCEPT:

All waived premiums must be repaid if the policyowner recovers from the disability.

Which life insurance rider pays the policy's cash value?

Return of cash value

Which life insurance rider pays an amount equal to the total premiums paid as long as the insured dies during a certain time period, as stated in the policy?

Return of premium

What is the term for a policy element that adds or takes away coverage?

Rider

When a juvenile covered by a payor rider reaches the specified age, what happens to the ownership of the policy?

The juvenile can assume ownership of the policy.