Life Insurance Riders Flashcards
Waiver of Premium
Waives premium during periods of total disability
Waiver of premium might be limited to disabilities that begin prior to…
65
Waiver of premium might require how many months of disability before going into effect?
6 months
Waiver of premium is not…
A loan against the policy
Payor Benefit
Waives premium for insurance on a child until age 21 or 25 if a parent dies or becomes disabled
Return of Premium
Pays death benefit and amount of paid premiums if the insured dies during a specific term
For return of premium, if death occurs beyond the term…
Insurer only pays death benefit
Guaranteed Purchase Option/Guaranteed Insurability Rider
Gives policyholder the option of buying more coverage at certain intervals or upon life events regardless of health
For Guaranteed Purchase Option/Guaranteed Insurability Rider, cost of new insurance will be based on…
Attained age
For Guaranteed Purchase Option/Guaranteed Insurability Rider, option might stop at…
65
Cost of Living Adjustments
Increases death benefit based on inflation, an economic index, or by a set amount on a regular schedule
Cost of living adjustments actually add what to an existing policy?
Increasing term insurance
Automatic Premium Loan
Free rider to perm LI that pays premium plus interest out of remaining cash value after grace period has ended
Double Indemnity/Accidental Death Rider
Pays double the death benefit for death from an accident
For Double Indemnity/Accidental Death Rider, insured must die within…
90 days of accident
For Double Indemnity/Accidental Death Rider, doesn’t apply if older than…
65
Accidental Death and Dismemberment
Pairs accidental death insurance with dismemberment coverage
Accidental Death and Dismemberment: Principal Sum
Pays when insured dies or loses multiple limbs
Accidental Death and Dismemberment: Capital Sum
Smaller amount pays when insured loses an eye or limb
Accelerated Death Benefits
Allow the insured to utilize parts of the death benefit, not just cash value, prior to death
Accelerated death benefits will have…
Dollar-for-dollar reduction in death benefit for beneficiary
Accelerated death benefit can access death benefit is insured person is diagnosed with…
Terminal illness (2 years to live)
Money from accelerated death benefit can be used…
As needed and not just for medical care
For accelerated death benefit, remainder of death benefit will…
Still go to beneficiary
Disability Income Rider
Allows the insured to receive portion of death benefits in case of total disability
Disability Income Rider often requires waiting period of disability before…
Benefits will be paid
