Question

2 riaz purchased a life insurance policy on his life with an added supplementary benefit which if used reduces the policys death benefit. which of the following supplementary benefits did riaz add to his policy?
a. disability income benefit
b. payor waiver benefit
c. terminal illness benefit
d. accidental dismemberment benefit

Explanation:

Terminal illness benefit is a supplementary life insurance benefit that typically provides an early payout of a portion of the death benefit if the insured is diagnosed with a terminal illness (with a short life expectancy). Unlike the other options (which do not reduce death benefits), this benefit uses a portion of the death benefit for the early payout, thus reducing the remaining death benefit available to beneficiaries upon the insured’s death. The question specifies the benefit "reduces the policy's death benefit," which aligns with the terminal illness benefit.

Answer:

c. Terminal illness benefit