Question

The death benefit amount under a children's term rider may be limited to a specified amount and/or:

a)the face amount of the base policy
b)a small percentage of the base policy's face amount
c)up to five times the base policy's face amount
d)any amount selected by the base policy's owner

Answer 1

The children's term rider's death benefit may be limited to the face amount of the base policy, a small percentage of it, up to five times its face amount, or any amount chosen by the policy owner.

It provides additional coverage for funeral expenses and immediate financial needs in the event of the child's death.

Step-by-step explanation:

The death benefit amount under a children's term rider on a life insurance policy may be limited based on the insurance company's rules. The options are:

1. The face amount of the base policy,
2. A small percentage of the base policy's face amount,
3. Up to five times the base policy's face amount, or
4. Any amount selected by the base policy's owner.

The children's term rider is an additional coverage where the death benefit is paid if the child insured under the rider passes away. This rider is meant to cover funeral expenses and other immediate financial needs after the loss of a child.

Cash-value (whole) life insurance, for example, has both a death benefit and a cash value component that can serve as an account for the policy owner's use.