Riders Flashcards
Ch 3 Riders (18 cards)
Waiver of Premuim Rider
Waives the premium for the ppolicy if the insured becomes totally disabled
Remains in force until the insured returns to work
6 month waiting period from time of disability, but at 6 months the previos 6 premiums will be waved
Must be a total disability
Usually expires at age 65
Waiver of Cost of Insurance
Found in Universal Life Insurance
Wauves the cost of insurance and other expenses, but does not waive the cost of premiums necessary to accumulate cash values
Waiver of Premium with Disability Income
-Covers premiums and pays a monthly income to insured
-Percentage paid is based on the percentage of the face amount of the policy to which it is attached
Waiver of Premium with Disability Income
Insurer will waive the policy premiums and pay monthly income to the insured
Amount paid is based on a percentage of the face amount of the policy to which it is attached
Payor Benefit Rider
Used primarily with juvenile policies
Functions like a waver of premium rider
If the Payor (Parent or Guardian) becomes disabled for atleast six months or dies, the surer will waive the premiums until the minor reaches a certain age, like 21
Spouse and other insured Term rider (Family Rider)
Provides coverage for one or more family members other than the insured
Usuallly level term insurance
Spouse Term Rider
Provides insurance coverage for the spouse of the insured
Allows this coverage for limited period of time and for a specified amount of time(usually expires when the spouse reaches age 65)
Children’s Term
***Provide temporary life insurance coverage on all children of the family for one premim
Allows children of the insured (natural, adopted or stepchildren) to be added to coverage for a limited period of time for a specified amount
Term insurance
Expires when the minor reaches a certain age (18 or 21)
Most riders provide that minor with the option of converting to a permanent policy without evidence of insurability.
Family term rider
Provides level term life insurance benefits to cover the spouse and all of the children in the family
Incorporates the spouse term rider along with the children’s term rider in a single rider
Nonfamily Term
Mostly used with Key Person Insurance when the key person or employee retires or terminates employment
Permits the polciy owner, owner or employer, to change the insured to another key empoyee, subject to insurability
Accidental Death Rider
Pays a multiple of the face amount if death is a result of an accident (Death must occur within 90 days of the accident)
The benefits is twice the face amount (double indemnity) or sometimes triple the amount (triple indemnity)
Usually expires when the insured is age 65
Accidental death and dismemberment Rider
For accidental death
Pays a percentage of that amount or a capital sum (percentage of the principal) for dismemberment
Guardenteed Insurability Rider
Allows the insured to purchase additional coverage at specified future dates (usually every three years) or events (such as marriage or birth of a child) with out evidence of insurability for an additional permium (premiums still based on attained age)
Usually expires when the insured’s age is 40
Return of Premium Rider
Added to increasing term insurance
When added to a whole life policy, it provides that death prior to a given age, not only is the face amount payable, but is also payable to the beneficiary
Usually expires at a specified age such as age 60.
Cost of Living
Term Rider
Addresses inflation factor by automatically increasing the amount of insurance WITHOUT evidence of insurability from the insured
Face Value is tied to an inflation index such as the Customer Price Index (CPI)
Accelerated Death Benefit (Living Benefit)
Allows early payment of a portion of the death benefit if the insured has any of the following conditions:
Maximum benefit is a percentage of the face amount of insurance (usually 50%) but it is legal for the insurer to pay up to 100%
Premium MAY be waived
May be a dollar limit
Face amount of insurance reduced after the payments.
Terminal illness
Medical Condition that requires extraordinary medical intervention (organ transplant, etc) to survive
A medical condition that without extensive treatment drastically limits the insured’s lifetime
Inability to perform ADLS
Permanent institutionalization or confinement to a long term are facility
Any other conditions approved by the Department of Insurance
Living Needs Rider
Provides for the payment of part of the policy death benefit if the insured is diagnosed with a terminal illness that will result in death within two years
Many insurance companies do not charge for this rider since it is siply an advance payment of the death benefit
The remainder of the proceeds are payable to a beneficiary
