Texas Life Agent Practice Exam

What type of life insurance rider pays the insured's premium during a period of disability?

1. Waiver of premium

2. Accidental death benefit

3. Automatic premium loan

4. Guaranteed insurability

The correct answer is: Waiver of premium

The type of life insurance rider that pays the insured's premium during a period of disability is known as the waiver of premium rider. This rider is crucial for individuals who may become disabled and unable to work, as it ensures that their life insurance policy remains in force without the need for premium payments during the time they are disabled. When a waiver of premium rider is included in a life insurance policy, it typically triggers under specific conditions, often after a waiting period defined in the policy. During this time, the insurance company will cover the premium payments, which protects the policyholder from losing their coverage due to financial hardship from disability. This rider provides significant peace of mind, knowing that even in adverse circumstances, their life insurance will continue to provide protection for their beneficiaries. The other options reflect different features or benefits that do not directly provide premium payment assistance during disability, making them less relevant to this specific question. For instance, an accidental death benefit rider typically pays an additional benefit if death occurs due to an accident, while an automatic premium loan provision allows the insurer to cover unpaid premiums by borrowing against the cash value of the policy. Meanwhile, the guaranteed insurability rider gives the policyholder the right to purchase additional coverage without medical underwriting but does not address premium