Life Only, Chapter 3 - B. Policy Riders

Accelerated death benefits allow the early payment of a portion of the death benefit if the insured has any of the following conditions:

- terminal illness - medical condition that requires an extraordinary medical intervention for the insured to survive (organ transplant) - medical condition that without extensive treatment drastically limits the insured's life time - inability to perform activities of daily living (ADL's) - permanent institutionalization or confinement to a long-term care facility - any other conditions approved by the Department of Insurance

The living needs rider provides for the payment of part of the policy death benefit if the insured is diagnosed with a terminal illness that will result in death within ____ years

2

The guaranteed insurability rider allows the insured to purchase additional coverage at specified future dates (usually every ____ years) or events (such as marriage or childbirth), without evidence of _______________, for an additional _______________ (based on attained age)

3; insurability; premium

The guaranteed insurability rider usually expires at the insured's age ____

40

The maximum benefit for an accelerated death benefit rider is typically a percentage of the face amount of insurance, usually _____%, but it is legal for the insurer to pay up to _________ of the death benefits before the insured dies.

50%; 100%; premium - there also may also be a dollar limit - face amount of insurance is reduced after the payments

The waiver of monthly deductions rider pays all monthly deductions while the insured is disabled, after a _____-month waiting period

6

The return of premium rider usually expires at a specified age such as _____

60

The accidental death rider often expires at the insured's age _____. No additional cash value is accumulated as a result of this rider. The accidental death benefits apply only to the policy's _______________ amount, and not to any additional benefits that may be purchased from policy dividends

65; base face

If the payor (parent/guardian) becomes disabled for at least ____ months or dies, the insurer will waive premiums until the minor reaches a certain age, such as ____

6; 21

Under an accidental death rider, the death must usually occur within _____ days of such an accident

90

Payable death benefit =

Face Amount - Amount Withdrawn - Earnings lost by insurer in interest

The children's term rider allows children of the insured (natural, adopted or stepchildren) to be.............

added to coverage for a limited period of time for a specified amount

The substitute insured or change of insured rider does not permit an additional insured, but instead allows the ___________ of insureds, subject to insurability

change

Monthly deductions of the "waiver of monthly deductions rider" include:

cost of insurance charges, expense charges, and costs or charges for any benefits added to the policy by rider, endorsement or amendment, and which are specified in the policy to be deducted from the account value

Many insurance companies do not charge for the living needs rider since it is simply an advance payment of the ________________. The remainder of the policy proceeds are payable to _________________ at the time of the insured's death

death benefit; the beneficiary

The length of time that the waiver of monthly deductions rider will pay monthly deductions will vary based on the age at which the insured becomes _________________

disabled

Under the waiver of premium rider, total disability is generally defined as the inability to _____________________; More specifically, total disability refers to the insured's inability to perform the duties of his/her own occupation for the first _____ years; then any gainful employment for which the insured is reasonably suited by education, training and experience.

engage in any work; 2

Accidental death under an accidental death rider does not include death that results from any _____________ problem or ______________. In addition, deaths that result from self-inflicted injuries, war, or hazardous ________________ or avocations are usually not covered.

health; disability; hobbies

The return of premium rider is implemented by using _________________ insurance. When added to a whole life policy, it provides that at death prior to a given age, not only is the original face amount payable, but an amount equal to all _________________ previously paid is also payable to the beneficiary

increasing term; premiums

The payor benefit rider is primarily used with ____________ policies; otherwise, it functions like the ___________________ rider

juvenile; waiver of premium - also used when the owner and the insured are two different individuals

The substitute insured rider (change of insured rider) is most commonly used with _______________ insurance when the _______________ or employee retires or terminates employment. The rider permits the policy owner, owner or employer, to change the insured to another key employee, subject to insurability

key person; key person - also often used by businesses that have a joint life policy that covers multiple key persons (example just above "3. Riders Affecting the Death Benefit Amount")

The other insured rider is usually ______________ insurance, attached to the base policy covering the insured

level term

The other insured rider (family rider) provides coverage for

one or more family members other than the insured

Children's term riders provide temporary life insurance coverage on all children of the family for ________________

one premium - premium doesn't change on inclusion of more children, based on average children

LTC riders provide for the payment of............

part of the death benefit in order to take care of the insured's health care expenses, which are incurred in a nursing or convalescent home

No benefits are payable for _______________

partial disability

The accelerated death benefit payout will not necessarily result in reduction of the _____________; however, it may be waived

premium

The accidental death and dismemberment rider (AD&D) pays the __________ (face amount) for accidental death, and pays a percentage of that amount, or ____________, for accidental dismemberment

principal; capital sum - the accidental portion is the same as that already discussed with the accidental death rider

Both the living needs rider and the payment of LTC benefits will ____________ the amount payable to the beneficiary upon the insured's death

reduce

if an insured withdraws a portion of the face amount by the use of the accelerated benefits rider, the benefit payable at death will be ______________ by that amount, plus the amount of earnings lost by the insurance company in ____________________

reduced; interest income

LTC coverage, which is often purchased as a seperate policy, can also be marketed as a ____________ to a _______________

rider; life insurance policy

The accidental death rider pays..............

some multiple of the face amount if death is the result of an accident as defined in the policy

If the other insured rider covers just the spouse of the insured, it can be specified as a ________________ rider, and allows the spouse to be added to coverage for a limited period of time and for a specified amount (it usually expires when the spouse reaches age _____)

spouse term; 65

The family term rider incorporates the _____________________ rider along with the _____________________ rider in a single rider

spouse term; children's term - when added to a whole life policy, the family term rider provides level term life insurance benefits covering the spouse and all of the children in the family - family term = spouse term + children's term

The children's term rider coverage is also ________ insurance and usually expires when the minor reaches a certain age (18 or 21). Most riders provide the minor with the option of converting to a _________________ policy without evidence of insurability

term; permanent

If an insured withdraws a portion of the face amount by the use of the accelerated benefits rider, the benefit payable at death will be reduced by that amount, plus.................

the amount of earnings lost by the insurance company in interest income (example under "Effect of Death Benefit")

Double indemnity

the benefit of an accidental death rider that is two times the face amount

The purpose of the living needs rider is ............

to provide the insured with the necessary funds to take care of necessary medical and nursing home expenses that incur as a result of the terminal illness

In order for the insured to qualify for the waiver of premium benefit, they must meet the policy's definition of

total disability

Triple indemnity

triple the face amount for accidental death

The waiver of monthly deductions rider is usually found in _________________ & ________________ policies

universal life; variable universal life

Most insurers impose a 6-month ________________ from the time of disability until the first premium is waived

waiting period - if still disabled after this period, insured is refunded the premium paid from the start of disability

Waiver of Premium Rider

waives the premium for the policy if the insured becomes totally disabled - coverage remains in force until insured can return to work - if the insured is never able to return to work, the premiums will continue to be waived by the insurance company - usually expires at age 65