New York State Life Insurance Exam Questions Practice Question
Which rider allows the policyowner to increase the face amount to adjust for inflation?
Correct Answer: B
Rationale: The Cost of Living rider enables the policyowner to increase the face amount of a policy to keep pace with inflation, ensuring that the coverage remains adequate over time.
Option A, Return of Premium, allows for the refund of premiums paid if the insured outlives the policy term but does not address inflation adjustments.
Option C, Payor Benefit, provides coverage for a policy’s premiums if the policyowner becomes disabled or dies, which is unrelated to inflation.
Option D, Guaranteed Insurability, permits the purchase of additional coverage at specified times without medical underwriting, but it does not specifically adjust for inflation.
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