What does the Return of Premium Rider provide?

What does the Return of Premium Rider provide?

• A. A disability income provision for a refund of part or all of the premium based upon favorable claims activity over a specified period of time.
• B. A rider that waives premiums during disability.
• C. A rider that increases death benefit upon expiration.
• D. A rider that converts policy to term.

Answer: (A)

Return of Premium Rider is a feature that promises to return at least a portion of the premiums you’ve paid if the insured survives the term of the policy. It’s not about providing income during disability, it doesn’t waive premiums while you’re disabled, it doesn’t increase the death benefit at expiration, and it doesn’t convert the policy to term. The appeal is that, if you outlive the term, you get some or all of the money you paid back, depending on the contract’s terms. In practice, the exact amount and timing of the refund vary by policy, and this rider can add cost to the premium. The idea to keep in mind is that this rider centers on getting premiums back after surviving the term, rather than providing disability benefits or altering the death benefit.

Return of Premium Rider is a feature that promises to return at least a portion of the premiums you’ve paid if the insured survives the term of the policy. It’s not about providing income during disability, it doesn’t waive premiums while you’re disabled, it doesn’t increase the death benefit at expiration, and it doesn’t convert the policy to term. The appeal is that, if you outlive the term, you get some or all of the money you paid back, depending on the contract’s terms. In practice, the exact amount and timing of the refund vary by policy, and this rider can add cost to the premium. The idea to keep in mind is that this rider centers on getting premiums back after surviving the term, rather than providing disability benefits or altering the death benefit.