Texas General Lines — Life, Accident, Health and HMOHealth InsuranceMedium
A health insurance policy includes a 'Waiver of Premium' rider. If an insured becomes totally disabled, what is the MOST likely impact of this rider?
- AThe policy's deductible will be waived for the duration of the disability.
- BThe insured will receive a lump-sum payment equal to all future premiums.
- CThe policy will continue in force without the insured having to pay premiums.
- DThe benefit period for disability income will be extended indefinitely.
Show answer & explanationAnswer & explanation
Correct answer: C. The policy will continue in force without the insured having to pay premiums.
A Waiver of Premium rider is designed to keep a health insurance policy in force if the insured becomes totally disabled. It waives the requirement for the insured to pay premiums during the period of disability, ensuring coverage continues without interruption.
Why the other options are wrong
- A. The waiver of premium rider affects premiums, not deductibles.
- B. A waiver of premium waives *future* premiums as they come due, it does not provide a lump-sum payment.
- D. The waiver of premium rider does not extend the benefit period; that is a separate policy provision.
Waiver of Premium Rider (Health)
A rider in a health insurance policy that waives the policyowner's obligation to pay premiums if they become totally disabled, ensuring the policy remains in force.
- Applies after a waiting period (e.g., 6 months).
- Premiums are waived for the duration of the disability.
- Policy benefits remain active.
- Often included with disability income or long-term care policies.
Memory trick: Riders add extra features; Waiver of Premium protects your wallet when disabled.