AD Banker Comprehensive Practice Exam

Should an insured become totally and permanently disabled two months before the cut-off date for the waiver of premium rider:

1. The insured remains eligible for all provisions

2. No benefits would be available due to the 6 month elimination period usually required, which would exceed the 2 months remaining on the rider

3. All provisions in the policy are now voided

4. The waiver of premium will only continue for the remaining two months

The correct answer is: The insured remains eligible for all provisions

In the context of a waiver of premium rider, if an insured becomes totally and permanently disabled shortly before the expiration of the rider’s benefit period, they would indeed continue to be eligible for the provisions outlined in the rider. This means that the rider's benefits would apply, allowing the insured to avoid paying premiums during their period of total and permanent disability. Typically, a waiver of premium rider is designed to provide coverage for the premiums while the insured is disabled, and the timing of the disability relative to the expiration of the rider is crucial. Since the disability occurrence falls within the beneficial period of the rider, it ensures that the insured can receive the financial support intended by the rider. The incorrect options stem from misunderstandings about the conditions of the waiver of premium. The elimination period mentioned typically applies to many disability policies, but in this scenario, the rider's provisions are still in effect until the cutoff date. The assertion that all provisions would be voided is also not accurate, as the rider’s purpose is fulfilled by allowing the insured to maintain their insurance coverage despite being unable to pay premiums due to disability.