Question

Each of the following riders affect the face amount of a life insurance policy, EXCEPT:

A. Cost of living rider
B. Return of premium
C. Waiver of premium
D. Accidental death

Answer 1

The return of premium rider does not affect the face amount of a life insurance policy. It provides a refund of premiums should the insured outlive the term of the policy but does not alter the policy's face value.

Step-by-step explanation:

The question is about riders in a life insurance policy. These riders can alter the policy by adding benefits or changing how the policy operates. Specifically, it asks which of the listed riders does not affect the face amount of a life insurance policy. Here's an overview of the riders:

1. Cost of living rider - This adjusts the face value of the insurance to keep up with inflation.
2. Return of premium - Pays back the premiums if the insured individual outlives the policy term, but it does not change the face amount.
3. Waiver of premium - Waives the premium payments if the policyholder becomes disabled but doesn't change the face amount.
4. Accidental death - Increases the payout if death is due to an accident.

The correct answer is B. Return of premium, as it does not affect the face amount of the life insurance policy.