AD Banker Comprehensive Practice Exam

Which rider would eliminate coverage for a preexisting condition?

1. None of these

2. Impairment Rider

3. Return of Premium Rider

4. Lifetime Benefit Rider

The correct answer is: Impairment Rider

The correct choice is the Impairment Rider, which is specifically designed to exclude coverage for certain preexisting conditions. When a policyholder has a health issue that existed prior to applying for insurance coverage, the insurer may attach an Impairment Rider to the policy. This rider specifies that the insurance will not cover expenses related to the identified condition, ensuring that the insurer limits its risk exposure related to that specific health issue. The effectiveness of an Impairment Rider lies in its ability to pinpoint specific conditions that the insurer deems too risky to insure from the outset. Therefore, while the rest of the policy may provide coverage for new conditions or other services, the impairment identified in this rider will not be covered. Other riders listed do not serve this purpose. The Return of Premium Rider is designed to refund premiums paid if certain conditions are met, while the Lifetime Benefit Rider typically focuses on extending benefits to the insured for their lifetime, which wouldn’t specifically eliminate coverage for preexisting conditions. None of these options would achieve the same exclusion of coverage as the Impairment Rider does.