Question

Which of these would NOT be a valid reason to add the waiver of premium rider to a life insurance policy?

A. Prevents a policy from lapsing in the event of total disability.
B. Premiums waived by the insurer do not have to be repaid by the policyowner.
C. Policy's cash value would still increase as policy premiums are being waived.
D. It allows a policy loan to cover premium payments if the policyowner becomes totally disabled.

Answer 1

The waiver of premium rider is a valuable addition to a life insurance policy, but it does not allow a policy loan to cover premium payments if the policyowner becomes totally disabled.

Step-by-step explanation:

The correct answer is D. It allows a policy loan to cover premium payments if the policyowner becomes totally disabled.

The waiver of premium rider is a valuable addition to a life insurance policy as it ensures that policy premiums are waived in the event of total disability of the policyowner, preventing the policy from lapsing. This means that the policy will continue to provide coverage even if the insured person is unable to pay the premiums due to disability.

However, the waiver of premium rider does not allow a policy loan to cover premium payments. Policy loans are separate provisions in a life insurance policy that allow the policyowner to borrow against the cash value of the policy. The waiver of premium rider is intended to waive premium payments, not to facilitate the payment of premiums through policy loans.