Tennessee Life Producer Practice Exam

What benefit does the Payor clause offer on a Juvenile Life policy?

1. Premiums are doubled upon the child's death

2. Premiums are waived if the payor becomes disabled

3. Higher death benefits for the juvenile

4. Cash values are added to the policy

The correct answer is: Premiums are waived if the payor becomes disabled

The Payor clause in a Juvenile Life policy provides the significant benefit of waiving premiums if the payor becomes disabled. This feature is essential because it ensures that the life insurance coverage remains in force even if the person responsible for paying the premiums can no longer do so due to a disability. This is particularly important in juvenile policies, where the payor is typically a parent or guardian. If they were to face a financial burden from a disability, this clause protects the child's policy from lapsing, ensuring that the child remains insured without interruption despite the circumstances affecting the payor. Other options do not correctly reflect the purpose of the Payor clause; for example, doubling premiums upon the child's death does not relate to this clause as it primarily concerns premium payments. Similarly, a higher death benefit or the addition of cash values to the policy is not directly tied to the Payor provision, as these aspects relate to the policy benefits and structure rather than the payer's financial circumstances.