Cost-of-Living Rider (COLA)
A rider adjusting the death benefit upward with an inflation index, keeping the policy's purchasing power intact.
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Practice This Concept
Which statement correctly describes a family income rider on a life insurance policy?
It pays the beneficiary monthly income for a set period if the insured dies while the rider is in force — A family income rider is a decreasing term rider attached to a base life policy. If the insured dies during the income period, the beneficiary receives a monthly income for the remainder of the period, typically until children reach a certain age or for a stated number of years. This provides income replacement during the dependency years when the family most needs support. The base policy separately pays its own death benefit. The rider is designed for young families that need income protection while children are still dependent and the family's earning capacity is critical.
National insurance concept
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