This rider can be attached to a permanent life insurance policy to add more coverage for a limited time.

Rationale

Term rider can be attached to a permanent life insurance policy to add more coverage for a limited time.

A term rider allows policyholders to add temporary coverage to their existing permanent life insurance policy, providing additional protection for a specified period. This feature is particularly beneficial for individuals looking to increase their coverage during certain life stages without purchasing a separate policy.

A (term rider) CORRECT

This option correctly identifies the type of rider that offers additional coverage for a limited duration. It allows the policyholder to secure extra life insurance protection, which is especially useful during times of increased financial responsibility, such as raising children or paying off a mortgage.

B (guaranteed insurability rider.) YOUR ANSWER

This rider provides the policyholder with the option to purchase additional coverage at predetermined times without undergoing further medical underwriting. While it offers an opportunity for increased coverage, it does not provide additional coverage for a limited time like the term rider does; instead, it ensures future insurability.

C (return of premium rider.) YOUR ANSWER

This rider allows the policyholder to recover the premiums paid for the term coverage if they outlive the term period. It does not add temporary coverage but rather modifies the return of premiums, making it a distinct concept from simply providing additional coverage for a set time.

D (cost of living rider.) YOUR ANSWER

The cost of living rider increases the death benefit based on inflation, helping to maintain the policy’s value over time. While it enhances the policy’s benefits, it does not specifically add temporary coverage for a limited period like the term rider does.

Conclusion

A term rider is an essential feature of permanent life insurance policies, allowing for increased coverage during specific phases of life without the need to purchase a separate policy. The other choices, while beneficial in various contexts, do not directly provide temporary coverage, highlighting the unique role of the term rider in life insurance planning.

This rider can be attached to a permanent life insurance policy to add more coverage for a limited time.

Term rider can be attached to a permanent life insurance policy to add more coverage for a limited time.

Related Questions

Related Quizzes

How familiar were you with this question?

Report an Issue

Rate this Practice Test