A life insurance policy includes a disability income rider. If the insured becomes totally disabled, this rider will typically:

Why A is correct

A disability income rider pays the insured a monthly income during total disability, in addition to keeping the death benefit intact. It is sometimes called an income replacement rider. This differs from a waiver of premium rider, which only forgives premiums during disability. Benefits under the rider generally stop when the disability ends or the insured reaches a specified age.

Why the other options are wrong

• B) Waiving premiums is the function of a waiver of premium rider; a disability income rider actually pays money to the insured.
• C) Disability does not double the death benefit; the accidental death benefit rider pays an additional amount only for death by accident.
• D) The rider does not surrender cash value; it pays income during disability while the policy's cash value and death benefit remain in force.

Memory hook

Disability income rider = pays you a paycheck when disability hits. Waiver of premium = just cancels the bill.

Why A is correct

The disability income rider pays the insured a monthly income during total disability - usually until age 65 - in addition to keeping the life insurance death benefit in force. It is distinct from the waiver of premium rider (which only waives premiums) and from accidental death benefits (which increase the death benefit). This rider is described under objective LIFE-III.1a.

Why the other options are wrong

• B) Waiving premiums during disability is the waiver of premium rider, not the income-paying disability income rider.
• C) An additional death benefit for accidental death is the accidental death benefit rider.
• D) The rider pays for disability, not retirement; it has no lump-sum retirement payout.

Memory hook

Disability income rider = a paycheck while disabled, on top of the death benefit.

Why A is correct

The disability income rider pays a monthly benefit, usually equal to a stated dollar amount or a percentage of the face amount, if the insured becomes totally disabled. Benefits typically begin after an elimination period and continue while the disability lasts, subject to the rider's limits. This rider is distinct from a waiver of premium rider, which merely stops premium payments, and it is priced as an additional benefit attached to the life policy. The benefit amount and elimination period are chosen at issue and are set out in the rider's schedule.

Why the other options are wrong

• B) The face amount is paid only at death; the rider pays periodic income during a qualifying disability. The benefit stops when the disability ends or when the rider's maximum benefit period is reached.
• C) Waiver of premium forgives premiums, but the disability income rider actually provides income in addition to any waiver. The face amount is paid at death; this rider instead pays income during a qualifying total disability.
• D) An accidental death benefit pays on accidental death; the disability income rider pays while the insured lives but is disabled. Waiver of premium is a separate rider that forgives premiums without paying any income to the insured.

Memory hook

Disability rider pays a paycheck when the insured is down. Waiver only pauses the bills; income rider covers the groceries.

Why A is correct

The disability income rider pays the insured a monthly income while totally disabled, typically after an elimination period, without reducing the life insurance coverage. The death benefit remains available to the beneficiary. The rider converts part of the policy's values into an income stream during disability, addressing the risk that disability rather than death strikes first during the working years.

Why the other options are wrong

• B) The rider does not replace the death benefit; it adds an income benefit while the life coverage stays in force.
• C) Paying the premiums for the insured is the function of a waiver-of-premium rider, not a disability income rider.
• D) Income to the family after death describes the life policy's own death benefit or a family income rider.

Memory hook

Disability income rider = a paycheck during disability on top of intact life coverage. Two protections, one policy.

Why A is correct

The disability income rider pays the insured a monthly income if the insured becomes totally disabled, typically for a limited period and after an elimination or waiting period. It protects the insured's own income during disability rather than providing a death benefit, which is the function of the base policy. This rider is often added to life insurance to cover the income gap created by a long-term disability and is subject to its own definition of total disability.

Why the other options are wrong

• B) A lump sum at death is the base policy's death benefit, not the function of the disability income rider.
• C) A waiver-of-premium rider waives premiums during disability; the disability income rider pays income and does not waive the death benefit.
• D) Retirement income is the function of annuities or retirement plans, not of a disability income rider.

Memory hook

DI rider = income on wheels while you are disabled; the death benefit stays parked in the base policy.