Question

S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008, and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy?

A) Accidental Death Benefit Rider
B) Guaranteed Insurability Rider
C) Paid-up Additions Rider
D) Return of Premium Rider

Answer 1

The rider included on the Whole Life insurance policy that resulted in an additional $500 payout upon the policyholder's death is the Accidental Death Benefit Rider.

Step-by-step explanation:

The student asked which rider was included on a $10,000 Whole Life insurance policy if the insurer paid out $10,500 upon the policyholder's death five years after purchase, given that an annual premium of $100 was paid. The additional $500 paid upon death indicates that the policy included a rider that provided an additional benefit over the face value of the policy. The correct answer is (A) Accidental Death Benefit Rider, which typically pays an extra benefit if the insured's death is due to an accident. Neither Guaranteed Insurability Rider, Paid-up Additions Rider, nor Return of Premium Rider would generally provide an additional $500 upon the death of the insured under these circumstances.