Waiver, guaranteed-insurability, payor, and accidental-death riders

Correct answer: The insured becomes totally disabled

Waiver of premium is a disability rider: total disability of the insured is what starts it, and the insurer then pays the premiums that fall due while that disability lasts.

Correct answer: About six months of continuous total disability

The standard elimination period on waiver of premium is roughly six months. Premiums falling due during that wait must still be paid, and are typically refunded once the claim is approved.

Correct answer: Inability to perform the duties of the insured's own occupation

Most waiver riders use an own-occupation standard for roughly the first two years and then tighten to an any-occupation standard: inability to perform any occupation the insured is reasonably suited to by education, training, or experience.

Correct answer: All three continue exactly as if the premiums were being paid

The whole point of the rider is that the contract carries on untouched: the insurer's payment stands in for the owner's, so cash value keeps building, dividends keep being credited, and the face amount is unchanged.

Correct answer: A stated age, commonly 60 or 65

The rider covers disabilities that start before a stated age, commonly 60 or 65, and the rider itself expires at that age; a disability that first arises afterward is not covered.

Correct answer: Waiver of monthly deduction

Universal life has no fixed premium to waive, so the rider instead absorbs the monthly cost of insurance and expense charges; it is sold as waiver of monthly deduction or waiver of a specified premium.

Correct answer: Pay the April 1 premium; the rider's elimination period has not yet run

The waiver does not begin until the elimination period, commonly six months, has been satisfied. Premiums coming due during the wait must still be paid on time or the policy lapses, and they are typically refunded when the claim is approved.

Correct answer: They are refunded to the owner once the claim is approved

Premiums falling due during the elimination period must be paid to keep the policy in force, but once the insurer approves the claim it typically refunds them retroactively to the date disability began.

Correct answer: The rider pays the policy's premiums, not a benefit to the insured; income replacement is the job of disability income insurance

Waiver of premium protects the policy, not the paycheck. Its entire benefit is that the premiums get paid so the coverage survives the disability. Replacing lost earnings requires a separate disability income contract.

Correct answer: A juvenile policy insuring a child

The payor benefit is the juvenile-policy rider: it protects a child's coverage against the death or total disability of the adult who pays for it.

Correct answer: The payor's -- typically the parent or grandparent paying the premiums

The defining feature of the payor rider is that the triggering life is the payor's, not the insured child's. That is also why the payor must be underwritten for the rider.

Correct answer: Until the child reaches a stated age, commonly 21 or 25

The waiver runs to a stated age of the insured child, commonly 21 or 25, on the assumption that the child can take over the premiums as an adult. The policy stays in force on the child's life throughout.

Correct answer: Evidence of insurability on the payor as well as on the insured child

The rider prices the payor's mortality and morbidity risk, so the payor must be underwritten for it even though the policy insures the child.

Correct answer: Premiums are waived until the granddaughter reaches the stated age in the rider, and the policy stays in force on her life

Total disability of the payor triggers the rider exactly as death would. The child's coverage continues unchanged, premium-free, until the stated age in the rider.

Correct answer: The payor rider looks to the life of the person paying the premiums, while waiver of premium looks to the life of the insured

Both waive premiums; they differ in whose disability or death starts the waiver. On a juvenile policy the insured child is not the premium payer, so the rider has to point at the payor instead.

Correct answer: The right to buy additional coverage at stated future dates without proving insurability

The rider sells future access to the underwriting desk. At each option date the owner may purchase a further block of coverage up to the stated option amount, and the insured's health at that moment is irrelevant.

Correct answer: Roughly every three years across the insured's mid-twenties to about age 40

The usual schedule is an option about every three years from roughly age 25 to age 40, with the rider expiring at the last option date.

Correct answer: Marriage, or the birth or adoption of a child

These are the rider's alternate option dates. They let the owner buy coverage when the need actually appears rather than waiting for the next scheduled date.

Correct answer: At the insured's attained age when the option is exercised

The rider waives evidence of insurability, not the cost of insurance. New coverage is priced at the insured's attained age, so it costs more than the original block did.

Correct answer: Up to that date's option amount only -- the option that lapsed is gone and is not added to it

Options are use-it-or-lose-it. A missed option expires at its own date and is not banked or carried forward, but the remaining scheduled options are unaffected and may still be exercised in the ordinary way.

Correct answer: Yes -- the rider waives evidence of insurability, so the diagnosis does not affect the right to buy

This is the scenario the rider is bought for. Because no evidence of insurability may be required at an option date, a diagnosis that would otherwise make the insured uninsurable does not close the option.

Correct answer: Buy up to $50,000 of additional coverage at attained-age rates with no medical questions

The option amount, not the base face amount, caps what may be bought at a single option date. The purchase is at attained-age rates and requires no evidence of insurability.

Correct answer: It locks in access to coverage before any health change can foreclose it, at a time when the need for coverage has not yet peaked

The rider converts an uncertain future -- whether the insured will still be insurable when the need arrives -- into a contractual right purchased cheaply while young and healthy.

Correct answer: An additional amount on top of the policy's face amount when death results from accidental bodily injury

The rider is an addition, not a substitute. Where the rider amount equals the base face amount, the total payable is twice the face, which is why the rider is nicknamed double indemnity.

Correct answer: Independently of all other causes

The standard wording requires the injury to be the cause of death independent of all other causes, which is what excludes deaths where disease is a contributing cause.

Correct answer: About 90 days

Standard riders require death within a stated period after the accident, commonly 90 days. A death outside that window pays the base face amount only.

Correct answer: The face amount is paid, but the rider does not, because aviation other than as a fare-paying passenger is a standard exclusion

The death was accidental, but the rider's exclusions take it out of coverage: aviation other than as a fare-paying passenger sits alongside war and military service, self-inflicted injury, and death while committing a felony. The base policy covers death from any cause and pays in full.

Correct answer: At a stated age such as 65 or 70

Accidental death riders are age-limited, typically ending around 65 or 70, after which the base policy alone remains in force.

Correct answer: The smaller amount, usually half the principal sum, payable for a single loss such as one hand or the sight of one eye

The principal sum is the full amount payable for accidental death or for two losses; the capital sum is the reduced amount, usually half, payable for a single loss.

Correct answer: $200,000 -- the base face amount only, because death fell outside the rider's stated period after the accident

Seven months is well outside the commonly stated 90-day window, so the rider pays nothing. The base policy is unaffected and pays its face amount in full.

Correct answer: The rider does not pay, because the heart attack means the injury did not cause death independently of all other causes

The independent-cause requirement is what decides this case. Where disease initiates the chain of events, the accident is not the independent cause of death and the rider is not payable, though the base policy pays in full.

Correct answer: It pays only for deaths that meet a narrow accidental-cause test, so the great majority of deaths collect nothing extra

Most deaths are from natural causes. A rider that pays only on an accident that caused death independently of all other causes, within a short period, and outside a list of exclusions leaves the ordinary case uncovered.

Correct answer: It carries its own charge on top of the base policy's premium

A rider is a priced benefit. Its charge is additional to the base premium, which is why riders are usually underwritten and added at issue rather than thrown in later.

Correct answer: They terminate with it -- a rider cannot stand alone

Riders are supplemental to the base contract. Surrendering or lapsing the policy ends every rider attached to it; none continues as separate coverage.

Correct answer: Current evidence of insurability for the rider

Adding a rider after issue means underwriting the new risk as of today. That is why riders are ordinarily requested at application, when the insured is being underwritten anyway.

Correct answer: A provision of the policy, or of a contract supplemental to it, providing additional benefits for death by accident or accidental means

Section 627.452(3) expressly excludes annuity contracts and any provision of a life policy or supplemental contract relating to health benefits or to additional benefits in the event of death by accident or accidental means.

Correct answer: It may not be inconsistent with or contradictory to any standard or uniform provision required to be used

Section 627.412(2) forbids a provision inconsistent with or contradictory to a required standard or uniform provision, though the office may approve a substitute provision it considers not less favorable to the insured or beneficiary.

Correct answer: Separately priced, with the prices set forth in the policy clearly, conspicuously, and understandably

Section 627.522(2) requires that each optional benefit and charge under an industrial life policy be separately priced and that the prices appear in the policy in a clear, conspicuous, and understandable manner.

Correct answer: A life insurer may not write a new policy of industrial life insurance, so there is no new policy to sell

Section 627.502(3) bars a life insurer from writing a new industrial life insurance policy beginning July 1, 2021. The separate-pricing requirement of s. 627.522(2) still governs existing industrial policies, but no new one may be issued.

Correct answer: A guaranteed insurability rider

The concern is future insurability, not present affordability, disability, or accidental death. Guaranteed insurability is the only one of the four riders that secures the right to buy more coverage later regardless of health.