Final answer:
The beneficiary will receive a payment of $237,000. This amount is calculated by considering the different riders and the loan taken against the policy's cash value.
Step-by-step explanation:
The beneficiary will receive a payment of $237,000.
To calculate the payment, we need to consider the different riders and the loan taken against the policy's cash value.
- The death benefit of the whole life policy is $250,000.
- The accelerated benefits rider of 40% allows the insured to receive 40% of the death benefit while they are still alive, in case of a terminal illness. So, the insured would receive $100,000 ($250,000 x 0.40) in equity.
- The accidental death rider of $100,000 is an additional benefit that would be paid if death is caused by an accident.
- The loan of $13,000 reduces the cash value of the policy.
To calculate the final payment to the beneficiary, we need to subtract the outstanding loan balance from the total equity received by the insured:
Total equity = $100,000 (accelerated benefits) + $100,000 (accidental death rider) = $200,000
Final payment to the beneficiary = Total equity - Loan balance = $200,000 - $13,000 = $187,000
However, we need to consider that the policy also has a waiver of premium rider, which means that premiums were waived during the period of the insured's terminal illness. So, the final payment to the beneficiary would be:
Final payment to the beneficiary = $187,000 (equity) + $50,000 (death benefit - waived premiums) = $237,000