Tennessee Life Producer Practice Exam

Which statement regarding the Waiver of Premium provision is incorrect?

1. Insured must be eligible for Social Security disability for claim to be accepted.

2. It allows the insured to avoid premium payments during a disability.

3. The provision applies only to specific insurance policies.

4. Claims under this provision must be documented thoroughly.

The correct answer is: Insured must be eligible for Social Security disability for claim to be accepted.

The Waiver of Premium provision is a feature found in many life insurance policies that allows the policyholder to stop making premium payments while they are disabled, without risking the coverage of their policy. The correct answer highlights that the statement claiming the insured must be eligible for Social Security disability for their claim to be accepted is incorrect. While eligibility for Social Security disability benefits may help establish the level of disability, it is not a requirement for claiming the Waiver of Premium benefit. Different insurers have their own criteria for establishing a disability under this provision, which may or may not align with Social Security standards. Understanding this aspect clarifies that while comprehensive documentation is indeed necessary for claims, it does not hinge solely on Social Security disability eligibility. Thus, the Waiver of Premium provision provides flexibility for policyholders to maintain their insurance coverage during periods of incapacity, without the added burden of premium payments, regardless of their status with Social Security.