Question

Because of financial obligations, John felt that he needed more insurance than the insurer was willing to issue. John's insurance producer told him that he could maximize the death benefit without increasing the face amount by the use of a(n)

Answer 1

John can maximize the death benefit without increasing the face amount of his insurance policy by using a paid-up additional insurance rider.

Step-by-step explanation:

To maximize the death benefit without increasing the face amount, John's insurance producer may suggest using a paid-up additional insurance rider. This allows John to purchase additional life insurance coverage without increasing the face amount of his policy. The premiums paid for this additional coverage can accumulate as cash value and provide John with more insurance protection.

For example, if John has a $100,000 policy and wants to increase the death benefit, the insurance producer can advise him to use the cash value of the policy to purchase a paid-up additional insurance rider, which would provide John with an additional death benefit. The accumulated cash value can be used to increase John's coverage without increasing the face amount.