State RegulationsOH specificDifficulty 1/5
A policyowner in Ohio adds a cost-of-living rider to a life policy. What is the rider designed to accomplish?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
A cost-of-living rider increases the death benefit periodically in step with an inflation index, usually for an additional charge, so the coverage purchased today preserves its future purchasing power. It is a rider whose form is subject to Ohio's policy-form filing framework administered by the Ohio Department of Insurance (ORC 3915.14).
Why the other options are wrong
- A) The rider's purpose is the opposite of locking the benefit - it grows the death benefit over time.
- B) The rider does not reduce premiums; increasing coverage generally adds cost.
- D) A life-income settlement option is a payout choice made by the beneficiary, not this rider.
Memory hook
COL rider: benefit climbs with the price tags.