Question 75

The statement describes the Payor Benefit rider.

In the context of life insurance, the Payor Benefit rider allows for the premium payments to be waived if the policyholder, typically a parent, passes away. This ensures that the child remains covered without the financial burden of premium payments until they reach a specified age.

A) Waiver of premium

The Waiver of Premium rider typically applies when the insured becomes disabled and unable to work, rather than in the event of the policyholder's death. While it does allow for premium payments to be waived, it does not specifically pertain to a situation involving a child as the insured.

B) Guaranteed Insurability

The Guaranteed Insurability rider allows policyholders to purchase additional coverage without undergoing a medical examination, but it does not relate to waiving premiums in the event of the policyholder's death. This option does not address the specifics of the situation described.

C) Payor benefit

The Payor Benefit rider is specifically designed for scenarios where the parent or payor of the policy dies, allowing for the continuation of coverage for the child without premium payments until a certain age. This aligns perfectly with the statement provided in the question.

D) Family income

The Family Income rider provides a benefit to the family in the form of a monthly income for a specified period in the event of the insured's death. However, it does not involve waiving premiums based on the death of the policyholder, making it unrelated to the question context.

Conclusion

The Payor Benefit rider is the only option that accurately describes the scenario of waiving premiums upon the death of the parent. All other options either pertain to different circumstances or do not directly address the waiver of premiums for a child’s policy under the described conditions. Thus, the Payor Benefit rider is definitively the correct answer.