Washington Life Producer Practice Exam

What benefit does a waiver of premium rider provide to the insured?

1. It allows coverage to be active without payment

2. It offers additional death benefits

3. It allows the insured to waive premium payments if completely and permanently disabled

4. It ensures lower premiums

The correct answer is: It allows the insured to waive premium payments if completely and permanently disabled

The waiver of premium rider is a valuable addition to a life insurance policy that specifically addresses the situation when the insured becomes completely and permanently disabled. When this rider is included in a policy, it allows the insured to stop making premium payments without risking the loss of coverage during periods of financial hardship due to disability. This means that if the insured is unable to work and generate income due to their condition, they do not have to worry about maintaining the policy, ensuring that their beneficiaries will still receive the death benefit without the insured having to pay premiums. While other options may seem appealing, they do not accurately describe the primary function of the waiver of premium rider. The rider does not provide additional death benefits, but rather maintains the existing death benefits of the policy without requiring further premium payments under qualifying circumstances. Additionally, it does not offer lower premiums—rather, it maintains the premium payments as long as the insured is healthy, and only waives them in the event of a qualifying disability. Thus, the primary focus of this rider is on the financial protection it provides to the insured during a period of incapacitation, allowing them to keep their life insurance in force without the burden of premium payments.