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

Correct answer: The insurer pays the premiums for her while the disability continues, and coverage, cash value growth, and dividend eligibility go on as if premiums were being paid normally

Waiver of premium waives the premium only. While total disability continues past the waiting period, the insurer funds the premium on the owner's behalf and the contract keeps performing normally — coverage stays in force and cash value and dividend eligibility continue. Premiums paid during the waiting period are commonly refunded when the claim is approved.

Correct answer: Premiums on the child's policy are waived until the child reaches the age stated in the rider

The payor benefit rider sits on a juvenile policy. Its trigger is the death or total disability of the payor — the adult funding the coverage — not the death of the insured child. The benefit is a waiver of premiums until the child reaches the age stated in the rider or the policy matures, so the child's coverage survives the loss of the person paying for it.

Correct answer: The additional coverage is issued with no new evidence of insurability, at a premium based on the insured's attained age

The guaranteed insurability rider removes health from the equation, not price. A specified additional amount may be purchased with no new evidence of insurability, but the new coverage is issued at the insured's attained age — so each successive option costs more than the last. Options not exercised within the stated window are lost.

Correct answer: $250,000, the base face amount only

The accidental death rider is triggered only when death results from accidental bodily injury, independent of all other causes, within the time limit stated in the rider. A heart attack is death from disease or natural causes, so only the base face amount of $250,000 is paid. No accident, no accidental death benefit.

Correct answer: All three riders terminate, because a rider has no independent existence apart from the base policy

A rider is an amendment attached to the base policy; the policy, its attached riders and endorsements, and the application together form the whole contract under the Texas Insurance Code's life insurance chapter. Because a rider has no independent existence, surrender or lapse of the base policy ends every rider attached to it.

Correct answer: A capital sum — a stated percentage of the principal sum for a lesser loss

An AD&D rider pays the principal sum for accidental death or a major loss, and a capital sum — a percentage of the principal sum — for lesser losses such as one hand or the sight of one eye. Loss of sight in one eye falls in the capital sum column of the schedule.

Correct answer: Payor benefit rider

The payor benefit rider is the one where the trigger attaches to a person other than the insured: on a juvenile policy, the death or total disability of the payor (the adult funding the coverage) waives premiums until the child reaches a stated age. Waiver of premium keys off the insured's own disability, guaranteed insurability keys off an option date or qualifying event, and the accidental death rider keys off the insured's accidental death.

Correct answer: Death must result from accidental bodily injury independent of all other causes, and must occur within the time limit stated in the rider after the accident

The accidental death rider's trigger has two parts: the death must result from accidental bodily injury, independent of all other causes, and it must occur within the time limit stated in the rider following the accident. Common exclusions (war, self-inflicted injury, certain aviation, death while committing an illegal act) and a terminal age also apply, but they are limits rather than the trigger itself.

Correct answer: It pays the premium on the owner's behalf while the disability continues, so coverage, cash value growth, and dividend eligibility go on as if premiums were being paid normally.

Waiver of premium waives the premium, never the face amount. The insurer steps into the owner's shoes and pays the premium while total disability continues, so the contract keeps performing normally: coverage stays level, cash value keeps growing, and dividend eligibility continues. On a universal life chassis the same idea appears as waiver of monthly deduction or waiver of cost of insurance.

Correct answer: He may buy the specified additional amount with no new evidence of insurability, priced at his attained age of 34.

The guaranteed insurability rider removes health from the underwriting question at each option date, but it does not freeze price. The specified additional amount is issued with no new evidence of insurability and rated at the insured's attained age, so each successive option costs more than the last.

Correct answer: Premiums on the child's policy are waived until the child reaches the age stated in the rider or the policy matures, and coverage on the child continues.

The payor benefit rider sits on juvenile policies and reverses whose health matters: the child is the insured, but the trigger is the death or total disability of the payor before the child reaches a stated age. When triggered, premiums are waived until the child reaches that age or the policy matures, so the child's coverage survives the loss of the person funding it.

Correct answer: The face amount only, because the rider's time limit between accident and death was not met.

The accidental death rider has two conditions: death must result from accidental bodily injury independent of all other causes, and it must occur within the time limit stated in the rider after the accident. Causation is satisfied here, but the 90-day limit is not, so the extra accidental death amount is not payable. The base policy is unaffected and still pays its face amount.

Correct answer: All three riders terminate with the base policy, because a rider is an amendment attached to the policy and has no independent existence.

A rider is an amendment attached to a life policy; it lives and dies with the base policy. In Texas the policy, the attached riders and endorsements, and the application together make up the entire contract, and life policy provisions are governed by the Texas Insurance Code's life insurance chapter within Title 7. When the base policy is surrendered or lapses, every rider attached to it ends as well.

Correct answer: The capital sum, a stated percentage of the principal sum for a lesser loss.

An AD&D rider adds a schedule of losses to the accidental death concept. The principal sum is paid for accidental death or a major loss; a capital sum, expressed as a percentage of the principal sum, is paid for lesser losses such as one hand or the sight of one eye.

Correct answer: Premiums paid during the waiting period are commonly refunded, and the insurer pays premiums going forward while the disability continues.

The waiver of premium rider requires total disability that begins before a stated age and persists past a waiting, or elimination, period. Premiums the owner pays during that waiting period are commonly refunded once the claim is approved, and the insurer then pays premiums for as long as the disability continues.

Correct answer: A guaranteed insurability option that is not exercised within its stated window is lost.

Guaranteed insurability options must be exercised within the window the rider states; unexercised options are lost, not carried forward. The other statements misstate the riders: waiver of premium waives premium and pays no separate death proceeds, and accidental death requires death from accidental bodily injury independent of all other causes within the rider's time limit.

Correct answer: It pays the premiums as they come due while the disability continues, so coverage, cash value growth, and dividend eligibility go on as though premiums were being paid.

Waiver of premium is triggered by the insured's total disability continuing past the waiting (elimination) period, and the benefit is that the insurer pays the premium on the owner's behalf. The contract stays fully in force: cash value continues to build and the policy remains dividend-eligible. Premiums paid during the waiting period are commonly refunded once the claim is approved.

Correct answer: Premiums are waived until the granddaughter reaches the age stated in the rider, and her coverage continues in force.

The payor benefit rider sits on juvenile policies. Its trigger is the death or total disability of the payor - the adult funding the coverage - not of the insured child. The benefit is waiver of premiums until the child reaches the age stated in the rider (or until the policy matures), so the child's coverage survives the loss of the person paying for it.

Correct answer: Premium based on the insured's attained age; no new evidence of insurability is required.

The guaranteed insurability rider removes health from the equation, not price. On a scheduled option date or qualifying event named in the rider, the owner may buy the specified additional amount with no new evidence of insurability, but the new coverage is issued at the insured's attained age, so each successive option costs more than the last. Options not exercised within the stated window are lost.

Correct answer: $250,000, the base face amount only.

The accidental death rider pays an additional amount only when death results from accidental bodily injury, independent of all other causes, and occurs within the time limit stated in the rider. Death from disease or natural causes - here a heart attack - is simply a covered death under the base policy, so the base face amount of $250,000 is paid and the rider adds nothing.

Correct answer: Accidental death or a major loss pays the principal sum, while a lesser loss such as one hand or the sight of one eye pays a capital sum, a stated percentage of the principal sum.

An AD&D rider adds a schedule of losses to the accidental death concept. The principal sum is the full amount, payable for accidental death or a major loss; a capital sum, expressed as a percentage of the principal sum, is payable for lesser scheduled losses such as one hand or the sight of one eye. Typical exclusions - war, self-inflicted injury, certain aviation, death while committing an illegal act - apply, and the benefit usually terminates at a stated age.

Correct answer: All three riders end with the base policy, because the policy, the attached riders and endorsements, and the application together make up the entire contract and a rider has no existence apart from the policy.

A rider is an amendment attached to the base policy; it has no independent life of its own. Under Texas law governing life policy provisions, the policy, the attached riders and endorsements, and the application together constitute the entire contract (Tex. Ins. Code ch. 1101, within Title 7). If the base policy lapses or is surrendered, every rider attached to it terminates as well.

Correct answer: Ana: waiver of premium, triggered by the insured's own total disability; Deion: payor benefit, triggered by the payor's death or total disability.

Both riders excuse premiums, but they watch different people. Waiver of premium responds to the total disability of the insured. The payor benefit rider, used on juvenile policies, responds to the death or total disability of the payor - the adult funding the child's coverage - and waives premiums until the child reaches a stated age. Ana insures herself, so waiver of premium fits; Deion is a payor on his son's juvenile policy, so the payor benefit fits.

Correct answer: Waiver of monthly deduction, also called waiver of cost of insurance

Universal life charges monthly deductions rather than a fixed premium, so the disability-triggered waiver appears as a waiver of monthly deduction, or waiver of cost of insurance. The concept is identical to waiver of premium: while the insured is totally disabled past the waiting period, the insurer absorbs the charges and the policy continues in force.

Correct answer: Payment of the policy premiums by the insurer while the disability continues, with coverage and cash value growth continuing normally

Waiver of premium waives the premium, not the face amount. Once total disability is established and the waiting period is satisfied, the insurer pays the premiums for the policyowner, and coverage, cash value growth, and dividend eligibility continue as if premiums were being paid normally. No cash is paid to the insured, so it is not a disability income benefit.

Correct answer: The grandmother dies or becomes totally disabled before the granddaughter reaches the age stated in the rider

On a juvenile policy the payor benefit rider turns on the payor's death or total disability, not the insured child's health. If the payor dies or becomes totally disabled before the child reaches the age stated in the rider, premiums are waived until the child reaches that age or the policy matures, so the child's coverage survives the loss of the person funding it.

Correct answer: At the insured's attained age, with no evidence of insurability required

A guaranteed insurability rider makes health irrelevant, not price. The additional coverage is issued with no new evidence of insurability, but it is priced at the insured's attained age, which is why each successive option costs more than the last.

Correct answer: $150,000, because death did not result from accidental bodily injury

The accidental death rider pays only when death results from accidental bodily injury, independent of all other causes, within the time limit stated in the rider. A heart attack is death from disease or natural causes, so only the base face amount of $150,000 is payable. No accident, no accidental death benefit.

Correct answer: All three riders terminate, because a rider has no existence apart from the base policy to which it is attached

A rider is an amendment attached to the base policy, and under Texas law the policy together with attached riders and endorsements and the application make up the entire contract (Tex. Ins. Code ch. 1101). A rider has no independent life: if the base policy lapses or is surrendered, every rider attached to it ends as well.

Correct answer: The capital sum, a stated percentage of the principal sum

An AD&D rider adds a schedule of losses. The principal sum is paid for accidental death or a major loss, while a capital sum -- a percentage of the principal sum -- is paid for lesser losses such as one hand or the sight of one eye.

Correct answer: Monthly deduction, sometimes called waiver of cost of insurance

Universal life is funded by flexible payments and charged by monthly deductions, so the same waiver concept appears as waiver of monthly deduction, or waiver of cost of insurance, rather than waiver of a fixed premium.

Correct answer: Applicant A needs a waiver of premium rider; Applicant B needs a payor benefit rider

Waiver of premium keys on the total disability of the insured, which fits Applicant A, who insures himself. The payor benefit rider sits on juvenile policies and keys on the death or total disability of the payor rather than the insured child, which fits Applicant B, the grandfather paying for his grandson's coverage.

Correct answer: It pays the premium for the policyowner while the disability continues, so coverage, cash value growth, and dividend eligibility go on as if premiums were being paid

Waiver of premium is triggered by the insured's total disability continuing past a waiting (elimination) period, and the benefit is that the insurer pays the premium on the owner's behalf. The contract stays fully in force: coverage continues, cash value keeps building, and dividend eligibility is unaffected.

Correct answer: Cost more, because the additional coverage is issued at the insured's attained age

A guaranteed insurability rider removes health from the equation, not price. Each option is issued at the insured's attained age, so every successive purchase costs more than the last.

Correct answer: Premiums on the child's policy are waived until the child reaches the age stated in the rider

A payor benefit rider sits on a juvenile policy. Its trigger is the death or total disability of the payor -- the adult funding the coverage -- not the insured child. The benefit is that premiums are waived until the child reaches the stated age, keeping the child's coverage alive.

Correct answer: $200,000, because death did not result from accidental bodily injury

The accidental death rider pays only when death results from accidental bodily injury, independent of all other causes, within the time limit stated in the rider. Death from disease or natural causes pays the base face amount alone -- here, $200,000.

Correct answer: Capital sum

An AD&D rider works from a schedule: the principal sum is paid for accidental death or a major loss, and the capital sum -- a stated percentage of the principal sum -- is paid for lesser losses such as one hand or the sight of one eye.

Correct answer: They all terminate, because a rider is an amendment to the base policy and has no independent existence

In Texas the policy, the attached riders and endorsements, and the application together form the whole contract under the life insurance provisions of Tex. Ins. Code ch. 1101, within Title 7 on life insurance and annuities. A rider is an amendment to the base policy, so when the base policy is surrendered or lapses, every rider attached to it ends with it.

Correct answer: Payor benefit rider

The payor benefit rider on a juvenile policy is the one where the trigger belongs to a different person than the insured: the child is insured, but the adult payor's death or total disability is what waives the premiums. Waiver of premium turns on the insured's own disability, and the accidental death rider on the insured's own accidental death.

Correct answer: Premiums paid during the waiting period are commonly refunded once the claim is approved, and the rider itself pays no cash benefit to the insured

The waiver is not a disability income benefit -- no cash goes to the insured; the insurer simply pays the premium. Because the claim must survive an elimination period, premiums the owner paid during that period are commonly refunded when the claim is approved.