A rider waiving premiums is called a

Rationale

A rider waiving premiums is called a disability rider.

A disability rider is an additional provision in an insurance policy that allows for the waiver of premium payments in the event the policyholder becomes disabled and unable to work. This feature ensures that the policy remains in force without the need for premium payments during the period of disability.

A (disability rider.) CORRECT

This is the correct answer as it directly refers to the provision that waives premium payments if the insured becomes disabled. This rider provides significant financial relief, ensuring that coverage continues without the burden of premium payments during difficult times.

B (term rider.) YOUR ANSWER

A term rider typically refers to a provision that adds a temporary insurance period to a permanent policy, often for specific needs or events. It does not pertain to waiving premiums; rather, it adds coverage for a limited time, and therefore does not address the situation of premium waivers due to disability.

C (cost of insurance rider.) YOUR ANSWER

A cost of insurance rider is designed to adjust the cost of insurance based on the insured's age or health status rather than providing premium waivers. It reflects the changing cost of providing coverage over time but does not relate to the waiver of premiums in case of disability.

D (cost of living rider.) YOUR ANSWER

A cost of living rider adjusts the benefits of the policy to keep pace with inflation, ensuring that the coverage remains adequate over time. While valuable, this rider does not provide the premium waiver feature associated with a disability rider.

Conclusion

In summary, a disability rider is the specific provision that waives premiums if the policyholder becomes disabled, ensuring continuous coverage during challenging circumstances. The other options, while relevant in the context of insurance, do not fulfill the requirement of providing a waiver of premiums, thus highlighting the unique benefit of the disability rider.

A rider waiving premiums is called a

A rider waiving premiums is called a disability rider.

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