Question 53

Payor benefit is designed to pay premiums on a child's policy if the parent dies.

The payor benefit rider ensures that if the parent who is responsible for paying premiums passes away, the insurance company will cover the premiums for the child's policy. This feature provides financial security and peace of mind during a challenging time.

A) Payor benefit.

This option is correct as the payor benefit specifically addresses the situation where a parent can no longer pay premiums due to death. It guarantees that the child's policy remains in force, ensuring continued coverage without the financial burden on the surviving parent or guardian.

B) Cost of living benefit.

The cost of living benefit is designed to increase the death benefit amount over time to keep pace with inflation. It does not relate to premium payments or address the situation of a parent's death, making it irrelevant in the context of this question.

C) Accidental death benefit.

The accidental death benefit provides additional coverage in the event that the policyholder dies due to an accident. While it offers extra financial support, it does not pertain to the payment of premiums for a child's policy, thus it is not applicable here.

D) Guaranteed insurability benefit.

The guaranteed insurability benefit allows policyholders to purchase additional coverage at specified times without undergoing medical underwriting. This rider does not address premium payments in the event of a parent's death, making it an incorrect choice for this question.

Conclusion

The payor benefit rider is specifically designed to ensure that a child's insurance policy remains active by covering premiums in the event of a parent's death, making it the correct choice. Other options, while beneficial in different contexts, do not provide the same assurance of premium payment protection for a child's policy.