Texas Life Agent Practice Exam

Which rider will activate if the policyholder dies tomorrow and owns a policy on their grandchild?

1. Child rider

2. Payor benefit rider

3. Accelerated death benefit rider

4. Dependent life rider

The correct answer is: Payor benefit rider

The payor benefit rider is specifically designed to protect the policy's dependent beneficiaries, such as children or grandchildren, in the event that the person who pays the premiums (the policyholder) passes away. When the policyholder dies, the rider allows the insurance company to waive premium payments for a certain period or until the dependent reaches a specified age, ensuring that the coverage remains active without financial burden on the dependent. In this scenario, if the policyholder dies and has a policy on their grandchild, the payor benefit rider would activate to help maintain the insurance coverage for the grandchild without requiring additional payments. The other riders mentioned do not fit this specific situation as directly as the payor benefit rider. The child rider typically provides coverage for the child but does not address the premium payment issue upon the death of the policyholder. The accelerated death benefit rider allows the policyholder to access part of the policy's death benefit while still alive in cases of terminal illness, which does not apply here. The dependent life rider provides insurance coverage on dependents but does not include premium payment provisions tied to the policyholder's death.