Policy Riders, Provisions, Options, and Exclusions
A policyowner exercises a long-term care rider on a life policy and receives benefits. What is the effect on the policy's death benefit?
Answer and explanation
Answer: B. An accelerated long-term care rider draws benefits from the policy's own death benefit. Amounts paid for care reduce the death benefit that remains for the beneficiary, dollar for dollar or on the stated basis.Source: NAIC Life Insurance Buyer's Guide — Riders: accelerated benefits for long-term care
More policy riders, provisions, options, and exclusions questions
- An insured with an accidental death and dismemberment rider loses the sight of both eyes in a covered accident. What does the rider ordinarily provide?
- An insurer tries to add an aviation exclusion after issue even though no aviation risk was disclosed or identified during underwriting. How does that compare with the Compact standard?
- An insurer wants to rely on a company underwriting manual to deny a claim, although the manual was never attached to the policy. What does the entire contract provision mean for that argument?
- An owner adds a spouse term rider to a base whole life policy. How is coverage structured for the spouse?
- An owner creates a trust for minor children and names the trust as policy beneficiary. What is the trustee's relevant role after the insured's death?
- An owner names 'my children, per stirpes.' One child dies before the insured but leaves two children. What result is the designation intended to produce?
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