Policy Riders, Provisions, Options, and Exclusions
A policyowner declines several offered cost of living increases in a row. What is the usual consequence under the rider?
Answer and explanation
Answer: A. Cost of living riders commonly provide that if the owner turns down a stated number of consecutive offered increases, the automatic increase option ends, since the anti-selection protection depends on regular acceptance.Source: NAIC Life Insurance Buyer's Guide — Riders: operation of automatic increase options
More policy riders, provisions, options, and exclusions questions
- The insured's age was misstated on a flexible-premium life application. When discovered, how should the provision generally respond?
- Under standard individual life policy provisions, what is the maximum initial suicide exclusion period permitted under IIPRC compact standards?
- Under the entire contract provision, what elements constitute the legal agreement between the owner and insurer?
- What benefit does a return of premium (ROP) term rider provide if the insured survives to the end of the term?
- What condition must be satisfied before a waiver of premium rider waives the policyowner's premium obligations?
- What does a life policy's suicide provision generally limit?
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