Question 89

Waives premiums on a juvenile policy if the policyowner becomes totally disabled or dies.

A payor benefit rider is designed to protect juvenile policies by waiving premiums in the event that the policyowner becomes totally disabled or dies, ensuring that the insurance coverage remains intact for the juvenile insured.

A) Waives premiums on a juvenile policy if the policyowner becomes totally disabled or dies.

This option accurately describes the function of a payor benefit rider. It specifically addresses the scenario where the policyowner, who is responsible for paying the premiums, is unable to do so due to total disability or death, thereby securing the policy for the juvenile insured.

B) Pays a monthly income to the policyowner if the insured is totally disabled.

This option is incorrect as it describes a different type of rider, typically a disability income rider. A payor benefit rider does not provide income but rather waives premiums to keep the policy active.

C) Waives policy premiums if the insured becomes totally disabled.

While this option mentions waiving premiums, it incorrectly states that the premium waiver is applicable if the insured becomes totally disabled, rather than the policyowner. The payor benefit rider is specifically linked to the policyowner’s disability or death.

D) Increases the value of the policy if the policyowner dies.

This option is incorrect because a payor benefit rider does not increase the policy's value upon the policyowner's death. Its primary function is to waive premiums rather than alter the policy's face value or benefits.

Conclusion

The correct answer, A, is definitive as it precisely outlines the purpose of a payor benefit rider in the context of juvenile policies. Options B, C, and D fail to accurately represent the rider's function, focusing instead on unrelated benefits or incorrect conditions under which premiums may be waived. This highlights the specific protective nature of the payor benefit rider for juvenile insurance policies.