Which rider refunds part or all of the premium based on favorable claims activity over a period?

Which rider refunds part or all of the premium based on favorable claims activity over a period?

• A. Waiver of Premium Rider
• B. Return of Premium Rider
• C. Family Rider
• D. Collateral Assignment

Answer: (B)

Return of Premium Rider is designed to refund all or part of the premiums you’ve paid if the policy term ends and no claim has occurred (or under other favorable claim patterns outlined in the contract). It’s essentially a built-in savings feature: because actual claims activity is favorable (few or no claims), you’re entitled to recover some of the money you paid for the policy. That’s why this rider best matches the idea of getting a premium refund based on performance over the period. Waiver of Premium Rider, by contrast, doesn’t return money. It waives future premiums if the insured becomes disabled. A Family Rider simply adds coverage for family members, and a Collateral Assignment assigns the policy to secure a loan. None of those involve refunding premiums.

Return of Premium Rider is designed to refund all or part of the premiums you’ve paid if the policy term ends and no claim has occurred (or under other favorable claim patterns outlined in the contract). It’s essentially a built-in savings feature: because actual claims activity is favorable (few or no claims), you’re entitled to recover some of the money you paid for the policy. That’s why this rider best matches the idea of getting a premium refund based on performance over the period.

Waiver of Premium Rider, by contrast, doesn’t return money. It waives future premiums if the insured becomes disabled. A Family Rider simply adds coverage for family members, and a Collateral Assignment assigns the policy to secure a loan. None of those involve refunding premiums.