A client purchases a $250,000 term policy for a $300 annual premium and elects to pay an additional $150 per year to recover the premium if the insured does not die during the policy term. Which of the following riders was added to the policy?

Rationale

Return of Premium

The client opted for a rider that allows for the return of the premium paid if the insured survives the policy term, providing a financial safety net in case the coverage is not utilized due to the insured's longevity.

A (Long-Term Care) YOUR ANSWER

This rider would typically provide coverage for long-term care expenses, offering financial assistance for services like nursing home care, home health care, and other related medical expenses. It is not related to recovering premiums in case of survival.

B (Return of Premium) CORRECT

Correct! The client added this rider to the policy, ensuring that if the insured outlives the policy term, the premiums paid are returned. This feature provides a unique form of financial protection by offering a refund if the insurance benefits are not utilized.

C (Waiver of Premium) YOUR ANSWER

The waiver of premium rider allows the policyholder to skip premium payments if they become disabled and are unable to work. This rider ensures the policy remains in force even if the insured cannot pay premiums due to a covered disability.

D (Guaranteed Insurability) YOUR ANSWER

This rider permits the policyholder to purchase additional coverage in the future without the need for a medical exam or proof of insurability. It does not relate to recovering premiums paid in case of the insured surviving the policy term.

Conclusion

By selecting the Return of Premium rider, the client secures a financial benefit that guarantees the return of the premiums paid if the insured does not pass away during the policy duration. This rider provides additional peace of mind by offering a refund in case the insurance coverage is not utilized, balancing the financial aspects of the policy with the client's long-term planning goals.

A client purchases a $250,000 term policy for a $300 annual premium and elects to pay an additional $150 per year to recover the premium if the insured does not die during the policy term. Which of the following riders was added to the policy?

Return of Premium

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