Massachusetts Life Producer Practice Exam

A life insurance policy's waiver of premium rider has the ability to...

1. Increase the face value of the policy

2. Provide cash value during premiums payment

3. Relieve the insured of premium payments following an initial waiting period after becoming totally disabled

4. Allow for automatic premium loans

The correct answer is: Relieve the insured of premium payments following an initial waiting period after becoming totally disabled

The waiver of premium rider is an important feature found in many life insurance policies that provides vital financial relief for policyholders. When a policy includes this rider, it essentially means that if the insured becomes totally disabled, they will not have to continue making premium payments after a specified waiting period. This is beneficial because if the insured is unable to work due to a disability, they typically face financial strain; the waiver alleviates the stress of losing their life insurance coverage during such a difficult time. For example, if the insured becomes totally disabled and meets the criteria outlined in the policy, the insurance company will continue to keep the policy in force without requiring additional premium payments. This ensures that the insured's family and beneficiaries will still have the life insurance coverage in place, even if the insured's ability to earn an income is compromised. This rider is particularly valuable because it protects the insured's financial interests and ensures continued coverage during a time when they need it the most. It directly addresses the scenario of total disability and the need for ongoing coverage without financial burden, making it the appropriate answer to the question about the function of a waiver of premium rider in a life insurance policy.