Life & Health Insurance Exam (National Portion)Life InsuranceMedium
A 28-year-old single parent wants to ensure their child will receive an income stream for 10 years if the parent dies prematurely. Which rider would best suit this need?
- AWaiver of Premium Rider
- BAccidental Death Benefit Rider
- CFamily Income Rider
- DGuaranteed Insurability Rider
Show answer & explanationAnswer & explanation
Correct answer: C. Family Income Rider
The Family Income Rider is designed to provide a regular income to the beneficiary for a specified period after the insured's death, which directly addresses the parent's need to ensure an income stream for their child for 10 years.
Why the other options are wrong
- A. The Waiver of Premium Rider pays premiums if the insured becomes disabled, it does not provide income to a beneficiary upon death.
- B. The Accidental Death Benefit Rider only pays an additional sum if death is accidental, not a regular income stream.
- D. The Guaranteed Insurability Rider allows the insured to purchase additional coverage in the future without proof of insurability, not an income stream.
Family Income Rider
A life insurance rider that provides a beneficiary with a regular income stream for a specified period if the insured dies during the rider's term.
- Provides income, not a lump sum.
- Paid for a pre-determined duration.
- Designed to replace lost income for dependents.
Memory trick: Riders add 'Extra' protection, like a 'Family' needs 'Income' after a loss.