With a life policy that includes a cost-of-living rider, a 4% CPI increase on a $100,000 face value would raise the face value by how much?

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Study for the Louisiana Series 103 – Life, Health, and Accident or Sickness Insurance Exam. Familiarize yourself with key concepts through engaging questions and explanations. Prepare effectively for your exam!

Multiple Choice

With a life policy that includes a cost-of-living rider, a 4% CPI increase on a $100,000 face value would raise the face value by how much?

Cost-of-living riders increase the policy’s death benefit based on inflation, usually by a stated percentage of the policy’s face amount. Here, CPI rises by 4% and the face amount is $100,000, so the increase is 4% of 100,000, which is $4,000. That means the face value would rise to $104,000. The other figures would correspond to different percentages or misreading: $60,000 would imply a 60% increase, $400 is 0.4% of 100,000, and $0 would mean no inflation adjustment.

With a life policy that includes a cost-of-living rider, a 4% CPI increase on a $100,000 face value would raise the face value by how much?

Study for the Louisiana Series 103 – Life, Health, and Accident or Sickness Insurance Exam. Familiarize yourself with key concepts through engaging questions and explanations. Prepare effectively for your exam!

With a life policy that includes a cost-of-living rider, a 4% CPI increase on a $100,000 face value would raise the face value by how much?

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