Return of Premium rider***

MR. WATSON: Now this is pretty cool. If a guy dies within a certain time frame, the company will pay the death benefit and return all the premiums he paid in. Now think about it. It simply an extra death benefit provided by a rider. A variation of this is the Return of Premium (ROP) term policy. If the guy is still alive at the end of the term he gets all his money back. The company has used his money to make money. Got it?

WOMAN: Sweet!!!

 

Disability Income Rider ***

MR. WATSON: This is not tied to the insured's earnings like a disability income policy is. It will pay a percentage of the face amount for the duration of the disability. Like the waiver of premium, there will be a waiting period before the benefits are paid and the insured must meet the company's definition of disability. Note the word "income" in the rider. This works similar to and generally comes along with the waiver of premium rider. But, it pays the insured an income after the waiting period. It usually pays a % of the face amount should the insured become disabled.

 

Automatic Premium Loan

MR. WATSON: No charge. Discussed earlier.

 

Long Term Care Rider ***

MR. WATSON: This rider is attached to a life policy that pays for nursing home confinement. The insured must meet the requirements for LTC such as the inability to perform at least two activities of daily living. Such as the inability to eat, transfer, bathe, etc. The amount payable will be a % of the face amount determined at the inception of the policy and will be subtracted from the death benefit at the time of death.

Long Term Care policies have exclusions, such as self-inflicted injuries. If the insured attempted suicide and failed, leaving him unable to perform the activities of daily living, the rider would not pay.

 

Cost of Living Rider

MR. WATSON: This rider guards against inflation. It's usually tied to the Consumer Price Index and has a cap each year of maybe 5%. No evidence of insurability is required each year. Simply an increasing term rider attached to the original policy. When the increase becomes effective, the insured is billed for the extra coverage. If the CPI goes down the policy does not go down.

MAN: Do we get commission on the increase?

MR. WATSON: I'm thinking not.

MR. WATSON: Good job!!!

Please make sure to do the practice test pertaining to Chapters five & six. Do them until you understand the material and are achieving a score of high 80s or low 90s.

The practice tests, video library, & Tuesday night Webcast are invaluable!!!

You guessed it, here they are again.