Question

27 monica owns a life insurance policy with a waiver of premium benefit that covers the policy’s premiums if monica becomes totally disabled. monica owns another policy on the life of her son robin and wants to make sure the policy remains in force even if she is unable to pay the premiums due to disability. how can she cover the premiums on robin’s policy if she becomes disabled?
a. she has to purchase a waiver of premium benefit for the policy on robin’s life.
b. she has to purchase a payor waiver benefit for the policy on robin’s life.
c. she has to purchase a parent waiver of premium benefit for the policy on robin’s life.
d. she has to replace robin’s existing life insurance policy with a limited payment policy.

Explanation:

To solve this, we analyze each option:

• Option a: A payor waiver benefit is for when someone (the payor, here Monica) pays premiums for another (Robin). If Monica becomes disabled, a payor waiver benefit on Robin’s policy would cover the premiums, matching the scenario.
• Option b: A waiver of premium benefit on Robin’s policy would apply if Robin is disabled, not Monica.
• Option c: Parent waiver benefit isn’t the standard term for this situation; payor waiver is more accurate.
• Option d: Replacing the policy isn’t necessary to cover premiums due to Monica’s disability.

Answer:

a. She has to purchase a payor waiver benefit for the policy on Robin's life.