Question 42

Term rider adds coverage for a limited time.

A term rider can be attached to a permanent life insurance policy to provide additional coverage for a specified period, allowing policyholders to increase their protection without changing the entire policy.

A) term rider

This option is correct because a term rider is specifically designed to add temporary coverage to a permanent life insurance policy. It allows the insured to benefit from increased coverage for a limited duration, which is a primary function of this rider.

B) guaranteed insurability rider.

The guaranteed insurability rider allows the policyholder to purchase additional insurance coverage at specified times without undergoing further medical underwriting. While it provides options for increased coverage, it does not add coverage for a limited time but rather guarantees the opportunity to buy more in the future.

C) return of premium rider.

The return of premium rider is a feature that refunds the premiums paid if the insured outlives the policy term. It does not provide additional coverage; instead, it focuses on the return of premiums rather than temporary increases in coverage.

D) cost of living rider.

The cost of living rider adjusts the death benefit of the policy based on inflation, ensuring that the coverage keeps pace with rising costs. However, it does not provide additional coverage for a limited time, making it an incorrect choice for this question.

Conclusion

The term rider is the only option that correctly describes a provision that adds temporary coverage to a permanent life insurance policy. Other options either guarantee future insurability, refund premiums, or adjust coverage based on inflation, none of which align with the requirement for limited-time coverage. Thus, option A is definitively the correct answer.