New York Insurance Exam Practice Question
What is the purpose of a policy's premium waiver rider?
Correct Answer: B
Rationale: A policy's premium waiver rider serves a specific function in the context of insurance. It allows the policyholder to have their premiums waived if they become disabled and unable to work, ensuring that coverage continues without financial strain.
Option A is incorrect as the rider does not increase the death benefit; it simply maintains the existing coverage. Option C is misleading; the rider does not cancel the policy but rather keeps it active during disability. Lastly, option D is incorrect because the rider does not reduce the cash value of the policy; it focuses solely on waiving premium payments during a qualifying disability.
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