Florida 2-15 Life, Health and Variable Annuity AgentFlorida Laws and Regulations Specific to Life Insurance and AnnuitiesEasy
A Florida insured has a whole life policy with a waiver of premium rider. If the insured becomes totally disabled and qualifies for the rider, what will happen to their policy?
- APremiums will be reduced by 50% for the duration of the disability.
- BThe cash value will be used to pay premiums until the disability ends.
- CThe insurer will waive future premium payments for the duration of the disability.
- DThe policy will convert to a Term Life policy until disability ends.
Show answer & explanationAnswer & explanation
Correct answer: C. The insurer will waive future premium payments for the duration of the disability.
A waiver of premium rider specifically states that if the insured becomes totally disabled, the insurer will waive all future premium payments for the duration of the disability, keeping the policy in force.
Why the other options are wrong
- A. This is incorrect; a waiver of premium rider typically waives 100% of the premium, not 50%.
- B. This is incorrect; while cash value can be used to pay premiums (e.g., through an Automatic Premium Loan), that is not the function of a waiver of premium rider.
- D. This is incorrect; the policy type does not change with a waiver of premium rider; it remains a whole life policy.
Waiver of Premium Rider
An optional life insurance rider that waives the payment of premiums if the insured becomes totally disabled, keeping the policy in force.
- Waives premiums, does not pay them
- Requires total and permanent disability definition
- Policy remains in force with all benefits
Memory trick: Disabled? No more premium pain, your policy stays, no need to strain.