A disability income rider attached to a life insurance policy provides:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The disability income rider pays a stated monthly benefit to the insured during total disability, typically after a short elimination period, while the underlying life insurance policy remains in force. It is a life insurance rider that provides income protection in addition to the death benefit. The rider is distinct from the waiver of premium rider, which only forgives premiums during disability. The benefit amount and the elimination period are chosen at issue and affect the rider's cost. This rider helps a disabled insured maintain income without reducing the life coverage.
Why the other options are wrong
- The rider pays monthly income; it does not automatically increase the face amount of the life insurance policy.
- Waiving premiums is the function of the separate waiver of premium rider; the disability income rider pays income instead.
- No rider pays the full face amount for a disability; the face amount is payable only at death under the life policy.
Memory hook
Disability income rider = a paycheck from the policy while you are disabled, on top of keeping life coverage alive.