Question

Which of the following riders would NOT increase the premium for a policyowner? Options: A) Waiver of Premium rider B) Impairment rider C) Accidental Death rider D) Guaranteed Insurability rider

Answer 1

The Impairment rider would NOT increase the premium for a policyowner because it excludes coverage for certain pre-existing conditions and does not add additional benefits that would increase the insurer's risk or costs.

Step-by-step explanation:

The rider that would NOT increase the premium for a policyowner among the options given is the Impairment rider. An Impairment rider is an insurance policy feature that specifically excludes coverage for certain pre-existing conditions, which can reduce the risk the insurer is taking on. It does not add additional coverage or benefits, therefore, it does not increase the premium. In contrast, the Waiver of Premium rider, Accidental Death rider, and Guaranteed Insurability rider all provide additional benefits or options that increase the insurer's risk or administrative costs, which, in turn, increases the policyowner's premium.

Answer 2

The rider that would NOT increase the premium for a policyowner is the "Accidental Death rider" (Option C).

An Accidental Death rider provides additional benefits if the insured person dies due to an accident. This type of rider is typically added to a life insurance policy with a minimal or no increase in premium because it covers a specific and less common cause of death.

The insurance company assesses a lower risk for accidental death compared to other factors that may affect mortality rates. In contrast, riders like the "Waiver of Premium," "Impairment," and "Guaranteed Insurability" riders often provide more extensive coverage or options, and they may require an additional premium payment from the policyowner. Thus, the correct answer is option (c).