Policy Riders, Provisions, Options, and Exclusions
A return of premium rider is attached to a permanent life policy. What does the rider add to the amount payable at the insured's death?
Answer and explanation
Answer: C. A return of premium rider uses increasing term insurance whose face amount tracks the cumulative premiums paid, so the total death benefit equals the base face amount plus premiums paid.Source: NAIC Life Insurance Buyer's Guide — Riders: return of premium benefit funded by increasing term
More policy riders, provisions, options, and exclusions questions
- What is the main purpose of a life policy's free-look period?
- What is the primary operational objective of an automatic premium loan (APL) provision?
- What restriction applies to an owner who names an irrevocable beneficiary?
- What right does a guaranteed insurability rider (GIR) grant to the policyowner?
- What standard requirements must a policyowner satisfy to reinstate a lapsed life insurance policy?
- When an increasing term rider is added to a whole life policy to provide a return-of-premium death benefit, what does the total benefit equal at death?
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