Question

27 monica owns a life insurance policy with a waiver of premium benefit that covers the policys 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 robins policy if she becomes disabled?
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a. she has to purchase a waiver of premium for the policy on robins life.
b. she has to purchase a payor waiver benefit for the policy on robins life.
c. she has to replace robins existing life insurance policy with a limited payment policy.
d. she has to purchase a parent waiver benefit for the policy on robins life.
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Explanation:

To determine the correct answer, we analyze each option:

• Option a: A waiver of premium for Robin’s policy would cover premiums if Robin is disabled, not Monica. So this is incorrect.
• Option b: A payor waiver benefit (also known as a payor benefit) is designed to waive premiums on a policy (usually a child’s policy) if the payor (the parent, Monica, in this case) becomes disabled. This matches Monica’s need to cover Robin’s policy premiums if she is disabled.
• Option c: Replacing the policy with a limited - payment policy doesn’t address the issue of premium payment in case of Monica’s disability. A limited - payment policy just means premiums are paid for a limited period, not related to disability - based premium waiver.
• Option d: There is no standard “parent waiver benefit” for this situation. The relevant benefit is the payor waiver benefit.

Answer:

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