PSI Life Exam Practice Test

What feature of a policy relieves a policyowner from paying premiums during a total disability?

1. Extended coverage option

2. Waiver of premium rider

3. Disability income rider

4. Premium reduction rider

The correct answer is: Waiver of premium rider

The feature that relieves a policyowner from paying premiums during a total disability is the waiver of premium rider. This rider is specifically designed for situations where the insured becomes totally disabled and unable to work. When this rider is in effect, the insurance company waives the premium payments during the period of disability, ensuring that the policy remains in force without financial burden on the policyowner. This is particularly beneficial as it protects the policyowner’s coverage during times when they may not have the financial means to continue paying premiums due to their inability to earn an income. In contrast, the extended coverage option generally pertains to maintaining coverage after premiums have stopped being paid, but it does not specifically relate to total disability. The disability income rider provides monthly payments to the insured if they become disabled but does not waive premium payments. The premium reduction rider serves to reduce the policy premiums, but it does not eliminate them during periods of disability. The waiver of premium rider is uniquely focused on relieving the policyholder from this obligation during a time of total incapacity.