Part 3: Benefit Riders and Other Products
Paper III — Long Term Insurance · Part 3: Benefit Riders and Other Products
Further reading: Benefit Riders and Other Products study notes →
Which of the following describes the function of a waiver of premium rider? I. Waive premiums for the main policy if the insured becomes totally disabled II. Continue paying premiums for the insured's family after the insured's death III. Allow the insured to stop paying premiums after retirement
Why: The core function of the WP Benefit Rider is: when the insured becomes totally disabled due to illness or accident, subsequent premiums on the main policy are waived, keeping the policy in force. This ensures the policy remains valid even if the insured loses earning capacity and cannot pay premiums. This rider does not provide additional benefits but is a premium cost protection mechanism.
The primary purpose of Disability Income coverage is:
Why: Disability income coverage aims to provide periodic (e.g. monthly) income replacement when the insured is unable to work due to illness or accident, helping to maintain their standard of living. Hospitalization expense coverage falls under health insurance, not disability income coverage. Disability income is typically paid monthly, not as a lump sum (lump-sum payment is characteristic of disability lump sum coverage).
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