What is the primary purpose of a term rider added to a permanent life insurance policy?

What is the primary purpose of a term rider added to a permanent life insurance policy?

• A. To enhance cash value accumulation.
• B. To provide additional term life coverage for a specified period.
• C. To reduce the policy's death benefit after the term ends.
• D. To make the policy renewable every year.

Answer: (B)

A term rider added to a permanent life insurance policy serves the primary purpose of providing additional term life coverage for a specified period. This means that the insured can benefit from a higher death benefit during the duration of the term rider, typically without the need for a separate term policy. The inclusion of the term rider allows for greater flexibility and meets immediate life insurance needs, especially for individuals who require more coverage temporarily—such as when children are young or during financial commitments like mortgage payments. Term riders typically have a fixed duration, and this temporary coverage complements the permanent life insurance policy that generally accumulates cash value and provides lifelong protection. By incorporating a term rider, policyholders can secure additional benefits without significantly affecting the existing features of their permanent life insurance. After the specified period ends, the term rider may expire without affecting the underlying permanent policy.

A term rider added to a permanent life insurance policy serves the primary purpose of providing additional term life coverage for a specified period. This means that the insured can benefit from a higher death benefit during the duration of the term rider, typically without the need for a separate term policy. The inclusion of the term rider allows for greater flexibility and meets immediate life insurance needs, especially for individuals who require more coverage temporarily—such as when children are young or during financial commitments like mortgage payments.

Term riders typically have a fixed duration, and this temporary coverage complements the permanent life insurance policy that generally accumulates cash value and provides lifelong protection. By incorporating a term rider, policyholders can secure additional benefits without significantly affecting the existing features of their permanent life insurance. After the specified period ends, the term rider may expire without affecting the underlying permanent policy.