A waiver of premium rider allows an insured to waive premium payments if the insured is

• A. completely and permanently disabled
• B. temporarily disabled
• C. retired
• D. over age 65

Answer: (A)

A waiver of premium rider is designed to keep the policy in force when the insured cannot pay due to a disability, so the insurer only waives premiums if the disability is total and permanent. This means the insured is unable to engage in any substantial gainful activity and isn’t expected to recover in the foreseeable future. Because the purpose is to protect the policy from lapse during a long-term loss of earning power, a temporary disability, retirement, or simply reaching an age limit does not qualify. The rider wouldn’t activate for those situations, but it does kick in once total, permanent disability is established, often continuing until a specified age or until the disability ends, depending on the contract.