Unit 7: Riders Flashcards
what is a rider?
Riders are special policy provisions that provide benefits not found in the original contract, or that make adjustments to it. These special provision are, in effect, attached to the policy, or ride it
What do you need to know with riders?
- what the rider is
- how you qualify to get the benefit it provides
- and how long it stays on the policy
what does pure rish premium do?
contribute money to cash value
What does the waiver fo premium
exempts a disabled policyowner from payment of premiums during the term of disability while keeping the policy in force.
what about the rider in relation to adding it?
It must be specifically requested and added
The waiver of premium rider subjects the company to greater risks than would be experienced if it were not added to the policy because it provides what?
it provides, in effect, that the company will pay the premiums should an insured become disabled.
When additional premium is charged for waiver of premium benefits, the extra charge does not what
increase the policy’s cash value but simply helps meet the costs of providing the waiver of premium benefit to all those policyowners requesting it
Inr elation to the waiver of premium rider, what must the disability be before the waiver of premium provision applies?
must be permanent and total
When an injury is permananeet and total, what does total imply
The insured is prevented (by disability) from engaging in his or her usual occupation. (OWN)
The insured is prevented from engaging in ANY work for gain or profit.
whether the disability is considered permanent involves what? what happens after the first answer? how long is this usually?
a waiting period after the onset of disability. If this waiting period elapses and the insured is still disabled, in the judgment of a company-authorized physician, then the disability is considered permanent. 3-6 months
during the waiting period, the permanency and totality of the insured’s disability have not yet been established, so the policyowner must do what?
continue making normal payments
once the disability proves to be permanent and total, the company does what?
refunds the premiums paid during the waiting period, because they were paid while the insured was, in fact, disabled.
While premiums are being paid by a company under the waiver of premium rider, the policy remains what?
in full effect in every aspect
What happens when a disabled policyowner recovers from a disability?
he simply begins paying his premiums again, starting with the next premium when it falls due.
The waiver of premium rider is usually not available when the policyowner reaches a specified age. what is that age?
commonly 60
When the waiver of premium rider expires as a result of the insured reaching a certain age, the compay does what?
lowers the premium to compensate for the loss of the benefits the rider provided-
If the insured should become disabled shortly before reaching age 60, he would still be eligible for what?
the benefit under the waiver of premium rider of the policy. This is true, even if the waiting period extends past the normal cutoff date of age 60.
Once a waiver of premium rider is attached to a policy, the company cant waht?
arbitrarily drop the rider. It must remain a part of the policy, that is, as long as the policyowner continues to pay premiums as agreed. However, if the policy should ever lapse and then be reinstated, the company can refuse to reinstate the waiver of premium rider.
There are certain exclusions that are commonly found in the waiver of premium rider. Disability caused by the following acts or actions is usually excluded. 3 of them. S I(squared)
- Self-inflicted injury
- Injury received in military service in time of war
- Injury received while committing a
Premiums on a universal life policy may fluctuate considerably; therefore, most companies provide that a waiver of premium rider on a universal life policy will guarentee what?
only the monthly cost of insurance, not the total premium the insured was paying.
Under the disability income rider, the company guarantees the insured policyowner a regular monthly income for how long?
as long as she remains totally and permanently disabled
The amount of the income is usually based on what?
he face amount of the policy— $x per month per $1,000 coverage, for instance.
most disability income riders inclue what?
waiver of premium
An income under the disability income rider continues for how long?
the length of the disability
An accidental death benefit rider may be added to an insurance policy to provide for what? and what is the amount?
an additional amount to be paid to the beneficiary should the insured die as the result of an accident.
This amount is usually the same as the face value of the policy and therefore is often referred to as double indemnity.
It’s essential that you understand the difference between these two important riders (disbaility rider and waiver of premium rider). What are both?
- The waiver of premium rider states that the company will pay the premiums on the policy during the insured’s total and permanent disability.
- The disability income rider stipulates that the company will pay the insured policyowner a monthly income during any period of total and permanent disability
Whatever the amount, the accidental death benefit may be paid only when what?
the insured dies as the result of an accident
In the accidental death rider the period of time permitted between the accident and the insureds death varies. but how long is it usually?
3 months or 90 days
