Unit 5 - Life Insurance Riders

capital sum

Amount provided for accidental dismemberment or loss of eyesight. Indemnities for loss of one member or sight of one eye are percentages of the capital sum.

accidental death and dismemberment (AD&D)

Insurance providing payment if the insured's death results from an accident, if the insured accidentally severs a limb above the wrist or ankle joints, or totally and irreversibly loses eyesight.

term insurance

Protection during limited number of years; expiring without value if the insured survives the stated period, which may be one or more years, but usually is to years because such periods generally cover the needs for temporary protection.

waiver of premium

Rider or provision included in most life insurance policies and some health insurance policies exempting the insured from paying premiums after the insured has been disabled for a specified period of time, usually six months in life policies and days or six months in health policies.

disability income rider

Typically a rider to a life insurance policy, it provides benefits in the form of income in the event the insured becomes totally disabled.

accidental death benefit (ADB) rider

a life insurance policy rider providing for payment of an additional benefit when death occurs by accidental means

other insured riders

a term rider, covering a family member other than the insured, that is attached to the base policy covering the insured

which of the following riders allow insureds who are terminally ill to obtain benefits from insurance policies prior to their death? a. accelerated benefits rider b. payor rider c. disability income rider d. waiver of premium rider

a. accelerated benefits rider

which of the following is a guarantee that at specified ages, dates, or events, the insured may buy additional insurance without a medical exam? a. guaranteed insurability b. return of premium c. accidental death d. waiver of premium

a. guaranteed insurability

exchange privilege rider

used to change the insured to a different person

cost of living (COL) rider

A rider available with some policies that provides for an automatic increase in benefits (typically tied to the Consumer Price Index), offsetting the effects of inflation.

payor rider

Available under certain juvenile life insurance policies, upon payment of an extra premium. Provides for the waiver of future premiums if the person responsible for paying them dies or is disabled before the policy becomes fully paid or matures as a death claim, or as an endowment, or the child reaches a specific age.

principal sum

The amount under an AD&D policy that is payable as a death benefit if death is due to an accident.

the amount of money paid by an accidental death benefit rider if the insured dies in an accident is referred to as the: a. principal sum b. principle sum c. capital sum d. capitol sum

a. principal sum

guaranteed insurability

arrangement, usually provided by rider, whereby additional insurance may be purchased at various times without evidence of insurability

waiting (elimination) period

duration of time between the beginning of an insured's disability and the commencement of the period for which benefits are payable

disabled

inability to work at any job that fits with the insured's education, training, or experience

return of premium rider

increasing term rider; the death benefit always equals the total of premiums paid for the rider and the underlying permanent policy

guaranteed insurability rider (GIR, GIO, GIB)

may be attached to a permanent life insurance policy and allows the owner to purchase additional life insurance at specified intervals in the future for certain amounts without having to provide evidence of insurability

Alberta is concerned that if she became totally and permanently disabled, she would not be able to pay her life insurance premiums and the policy will lapse. Which type of rider should she consider to protect against this possibility? a. waiver of premium rider b. accidental death and disability rider c. disability income rider d. payor rider

a. waiver of premium rider

which of the following terms describes something that is used to add benefits to a life insurance policy and customize the coverage to an insured's particular needs? a. a life insurance addition b. a rider c. a premium d. a contract

b. a rider

which of the following riders is increasing term insurance that always equals the total premiums paid during the time the policy is in effect? a. guaranteed insurability b. return of premium c. accidental death d. waiver of premium

b. return of premium

life insurance riders

benefit options to tailor a policy to the owner's needs

Tammy has a $100,000 life insurance policy with a double indemnity rider. Tammy is killed in an automobile accident. How much will the policy pay? a. $100,000 b. $180,000 c. $200,000 d. $400,000

c. $200,000

all of the following statements about the waiver of premium rider are true EXCEPT: a. with the waiver of premium rider, at first, insureds are considered disabled if they are unable to work at their present job b. with the waiver of premium rider, if an insured recovers and return to work after a disability they must begin paying policy premiums again c. with the waiver of premium rider, premiums are reduced by 80% during any period that the insured is disabled d. with the waiver of premium rider, if the insured becomes permanently disables before the insured's working years end, premiums will continue to be waived for life

c. with the waiver of premium rider, premiums are reduced by 80% during any period that the insured is disabled

which of the following riders allows for an advance of the death benefit if the insured is confined to a nursing home or cannot perform the activities of daily living? a. guaranteed insurability rider b. accidental death or dismemberment rider c. return of premium rider d. long-term care rider

d. long-term care rider

Paul has a life insurance policy on his son for which he pays all the premiums. A rider to this policy states that if Paul becomes permanently and totally disabled, the premiums will be paid until his son reaches age 21, at which point his son will take over the premium payments. Which type of rider does he have? a. waiver of premium rider b. accidental death and disability rider c. disability income rider d. payor rider

d. payor rider

which of the following is waiver of all future premiums in the event of total and permanent disability? a. guaranteed insurability b. return of premium c. accidental death d. waiver of premium

d. waiver of premium

for an accidental death benefit rider to be payable the insured must die (die to injury from the accident) within how many days of the accident? a. 30 b. 60 c. 90 d. 180

c. 90

the amount of money paid by by an accidental death and dismemberment rider if the insured is disabled in an accident is referred to as the: a. principal sum b. principle sum c. capital sum d. capitol sum

c. capital sum

which rider lets insureds buy additional coverage without proof of insurability in order to keep pace with inflation? a. guaranteed insurability b. accidental death and disability rider c. cost of living d. payoff rider

c. cost of living

Kumar has a life insurance policy with a rider that will pay him $1,000 per month if he is totally and permanently disabled. Which type of rider does he have? a. waiver of premium rider b. accidental death and disability rider c. disability income rider d. payor rider

c. disability income rider