If a father with a life insurance policy on his daughter becomes disabled, what happens to the premiums?

If a father with a life insurance policy on his daughter becomes disabled, what happens to the premiums?

• A. The premiums must be paid by the daughter.
• B. The premiums will be waived until the daughter is 21.
• C. The policy will lapse if premiums are not paid.
• D. The father must find alternative insurance.

Answer: (B)

The correct response highlights a common provision found in many life insurance policies called the "waiver of premium rider." This rider typically provides that if the policyholder becomes disabled for a specified period, the insurance company will waive the premiums due on the policy during the disability. In this scenario, since the father holds a life insurance policy on his daughter, if he becomes disabled, the premiums would be waived until the daughter reaches a certain age, which is often around 21. This means the policy does not lapse due to non-payment of premiums while the policyholder is unable to work because of his disability. This rider is designed to protect both the policyholder's and the insured's interests, ensuring that coverage remains intact during challenging times without imposing financial strain on the policyholder.

The correct response highlights a common provision found in many life insurance policies called the "waiver of premium rider." This rider typically provides that if the policyholder becomes disabled for a specified period, the insurance company will waive the premiums due on the policy during the disability.

In this scenario, since the father holds a life insurance policy on his daughter, if he becomes disabled, the premiums would be waived until the daughter reaches a certain age, which is often around 21. This means the policy does not lapse due to non-payment of premiums while the policyholder is unable to work because of his disability.

This rider is designed to protect both the policyholder's and the insured's interests, ensuring that coverage remains intact during challenging times without imposing financial strain on the policyholder.