Texas Life Agent Practice Exam

Which rider allows premiums to be waived in case of death or disability of the premium payer?

1. Accelerated death benefit rider

2. Disability income rider

3. Payor benefit rider

4. Waiver of premium rider

The correct answer is: Payor benefit rider

The payor benefit rider is specifically designed to address the situation where the individual responsible for paying the premiums on a policy becomes disabled or dies. When this rider is attached to a life insurance policy for juveniles, for example, it ensures that the premiums will continue to be paid even if the payor (typically a parent or guardian) is no longer able to do so due to death or disability. This rider effectively alleviates financial stress during challenging times, thereby ensuring that the coverage remains in force. The essence of this rider is to protect the policy from lapsing when the person responsible for premiums can no longer fulfill that obligation. The other choices represent different types of benefits or provisions that do not specifically focus on waiving premiums due to the payor's death or disability. For instance, the accelerated death benefit rider allows for early payout under certain conditions but does not address the payment of premiums. The disability income rider provides income replacement in case of the policyholder's disability but does not waive premiums. The waiver of premium rider does waive premiums in the case of the insured’s disability, but it does not apply when the premium payer dies. Therefore, the payor benefit rider is the correct choice as it precisely addresses premium waiving due to the