Podcast
Questions and Answers
What is another name for the Guaranteed Insurability Rider?
What is another name for the Guaranteed Insurability Rider?
- Future Payment Option
- Future Increase Option (correct)
- Evidence of Insurability Option
- Guaranteed Purchase Rider
What is generally not allowed when exercising the additional purchase option after age 50?
What is generally not allowed when exercising the additional purchase option after age 50?
- Investment earnings will be included
- Exercising the option based on the current health status
- Request for increased coverage amount beyond a specified limit (correct)
- Purchasing amounts exceeding normal insurance limits
What determines the premium for the additional insurance amount purchased under this rider?
What determines the premium for the additional insurance amount purchased under this rider?
- The insured's original policy amount
- The insured's age at the time the option is exercised (correct)
- The duration of the policy
- The health status of the insured at the time of the policy
What must be fulfilled before each purchase under the Guaranteed Insurability Rider?
What must be fulfilled before each purchase under the Guaranteed Insurability Rider?
At what intervals are insured individuals typically given the option to purchase additional coverage?
At what intervals are insured individuals typically given the option to purchase additional coverage?
What is the primary purpose of an impairment or exclusion rider?
What is the primary purpose of an impairment or exclusion rider?
How might an impairment rider affect the cost of an insurance policy?
How might an impairment rider affect the cost of an insurance policy?
In which situation might a person find an impairment rider beneficial?
In which situation might a person find an impairment rider beneficial?
What factor does the underwriter consider when issuing an exclusion rider?
What factor does the underwriter consider when issuing an exclusion rider?
Which statement is true regarding impairment or exclusion riders in insurance policies?
Which statement is true regarding impairment or exclusion riders in insurance policies?
What is a temporary impairment rider?
What is a temporary impairment rider?
Which is NOT a characteristic of the impairment rider?
Which is NOT a characteristic of the impairment rider?
When might a policy be issued with an exclusion rider?
When might a policy be issued with an exclusion rider?
Flashcards are hidden until you start studying
Study Notes
Impairment or Exclusion Rider
- An impairment rider eliminates coverage for specific pre-existing conditions, like back injuries.
- It can be temporary or permanent; once applied, it excludes certain conditions from coverage.
- Insurers often use exclusion riders to grant access to insurance for individuals with existing impairments, despite higher risks.
- Example: A physician may receive a disability policy with an exclusion on back-related claims, allowing coverage for other disabilities.
- Terms of the exclusion are explicitly stated in the insurance policy, emphasizing clarity.
- Unlike most riders adding coverage, the impairment rider removes coverage without reducing premium costs.
Guaranteed Insurability Rider
- Also known as the Future Increase Option or Guaranteed Purchase Option.
- Allows insured individuals to purchase additional disability income coverage without proving insurability.
- Insureds receive specific option dates, typically every two years, to exercise this additional coverage.
- Companies generally restrict exercising the option beyond age 50 to limit risk exposure.
- Premiums for additional insurance are calculated based on the insured’s age at the time of purchase.
- To prevent over-insurance, an earnings test is required before each purchase option.
- Insurers often cap the coverage amount available at each option date, typically between $500 and $5,000.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
