Insurance Payor Benefit Rider Quiz

Questions and Answers

What is the primary payment limitation for health-related riders in an insurance policy?

The premium cannot exceed the premium under the base product by more than 100%. (correct)

The total premium for all riders must not exceed 25% of the base policy premium.

The premium cannot exceed 50% of the base product premium.

Each rider's premium can be equal to the sum assured.

What type of insurance policy would best protect Mr. Vinod Rathod's family from the burden of a housing loan in case of his death?

Decreasing Term Insurance/Mortgage Redemption Insurance (correct)

Term Insurance with fixed premium

Whole Life Insurance

Guaranteed Return Insurance

Which policy type is most suitable for Mr. Suresh Chandra's goal of funding his son's education over time?

Unit Linked Insurance Plan (ULIP)

Money Back Policy with periodical pay outs (correct)

Term Insurance with a long duration

Endowment Plan with a lump sum payout

What happens to the benefit of a pure endowment policy if the policyholder dies before the policy term ends?

No benefit is payable to the beneficiary. Signup and view all the answers

Which statement best represents the characteristics of whole life insurance?

It accumulates cash value over time. Signup and view all the answers

Which option is a key benefit of term insurance?

It typically has lower premiums compared to whole life insurance. Signup and view all the answers

What is the implication of naming a beneficiary in an insurance policy?

The beneficiary receives the benefits directly upon the policyholder's death. Signup and view all the answers

In what scenario is a cash value accumulation feature particularly beneficial?

When seeking lifelong coverage with investment aspects. Signup and view all the answers

What is the total payout in case of total disability due to an accident?

Rs. 20 lakhs Signup and view all the answers

What happens to future premiums if the Critical Illness Benefit Rider is taken with the Waiver of Premium rider?

They are waived. Signup and view all the answers

How much is the death benefit paid in the event of the policyholder's death under the Term Rider?

Rs. 40 lakhs Signup and view all the answers

Which rider provides an additional lumpsum benefit in the case of critical illnesses?

Critical Illness Benefit Rider Signup and view all the answers

What is the sum assured for the Critical Illness Benefit Rider?

Rs. 20 lakhs Signup and view all the answers

Which of the following benefits is NOT associated with the Policy if a Critical Illness is diagnosed?

Terms of the policy are changed Signup and view all the answers

At what ages are the specified policies valid according to the provided information?

35, 50, 55 years Signup and view all the answers

Which benefit is specifically provided under the Term Rider in case of death?

Additional sum assured Signup and view all the answers

What happens to future premium payments under the Payor Benefit Rider if the proposer dies?

All future premiums are waived. Signup and view all the answers

Under which condition will all future premiums be waived for the Waiver of Premium Rider?

Permanent disability or diagnosis of critical illness of the Life Assured. Signup and view all the answers

What is a primary benefit of using riders in insurance policies?

They simplify the management of multiple policies. Signup and view all the answers

What occurs if the base policy associated with a rider is surrendered or lapses?

All rider benefits must also be forfeited. Signup and view all the answers

Which ages are mentioned for the Life Proposer in conjunction with the benefit riders?

35, 50, 55 years. Signup and view all the answers

What effect does the critical illness diagnosis of the Life Assured have on the Waiver of Premium Rider?

All future premiums are waived. Signup and view all the answers

How does the Payor Benefit Rider support children or spouses under the policy?

It waives premiums in case of the proposer’s death or disability. Signup and view all the answers

Which statement about the benefits of riders is incorrect?

Rider benefits can exist independently of the base policy. Signup and view all the answers

Study Notes

Premium Waiver Benefit Rider (Payor Benefit Rider)

Applicable when a policy is taken on the life of children or spouse.
In the event of the proposer’s death or disability, future premiums are waived.
The policy continues to provide full benefits for the life assured (children/spouse).
Covers cases of death or permanent disability of the life proposer (LP).

Waiver of Premium Rider

Waives premium payments if the policyholder suffers critical illness, serious injury, or disability due to an accident.
Future premiums are waived off upon diagnosis of critical illness or permanent disability of the life assured (LA).

Key Points about Riders

Riders add convenience by allowing multiple benefits under a single policy.
Rider benefits are valid only while the base policy is in force.
If the base policy lapses or is surrendered, rider benefits are forfeited.
Health-related rider premiums cannot exceed 100% of the base policy premium.
Total premium of all riders should not be more than 30% of the base policy premium.
Rider benefits shouldn’t exceed the sum assured of the base policy.
Rider premiums are generally lower than standalone policy premiums.

Case Studies Overview

Case Study 1: Mr. Rahul Desai with a pure endowment policy worth Rs. 75,00,000 dies; no benefit is payable to his wife.
Case Study 2: Mr. Vinod Rathod (27) seeking Rs. 50 lakh housing loan should consider a Decreasing Term Insurance or Mortgage Redemption Insurance.
Case Study 3: Mr. Suresh Chandra (35) should opt for a Money Back Policy with periodic payouts for his son’s future education expenses.

Recap of Benefits

Life insurance products protect against loss of productive earning capacity.
In cases of total disability due to an accident, Rs. 20 lakhs may be paid in installments, while the base policy continues.
Benefits under riders like Critical Illness Rider can amplify the base policy's protection, also waiving future premiums.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

This quiz covers the essentials of the Payor Benefit Rider, specifically related to life insurance policies taken on children or spouses. It focuses on the premium waiver benefits in cases of the proposer’s death or permanent disability. Test your understanding of this crucial aspect of life insurance.