Tennessee Life Producer Practice Exam

What type of rider is attached to a life insurance policy that waives premiums if the insured becomes disabled?

1. Waiver of Premium

2. Accidental Death

3. Return of Premium

4. Child Term Rider

The correct answer is: Waiver of Premium

The Waiver of Premium rider is specifically designed to provide financial relief by waiving the policyholder's premium payments in the event of the insured becoming disabled. This means that if the insured individual cannot work due to a qualifying medical condition, this rider ensures that their life insurance coverage remains active without the need to pay premiums during that period of disability. This rider is particularly valuable because it allows the insured to maintain their coverage despite financial difficulties that may arise from an inability to earn an income due to their disability. Other riders, such as the Accidental Death rider, provide additional benefits in the event of death caused by an accident but do not offer premium waivers. The Return of Premium rider allows for the return of premiums paid if the insured outlives the policy term, but it does not apply in cases of disability. A Child Term Rider provides life insurance coverage for a policyholder's children but does not address premium payments or disability. Thus, the Waiver of Premium rider stands out as the correct answer in this context.