A disability income rider attached to a life insurance policy is designed to:

Why A is correct

A disability income rider provides the insured with a monthly income if he or she becomes totally disabled, replacing a portion of lost earnings during the disability. This is different from the waiver of premium rider, which merely pays the policy premiums so coverage stays in force, and from the accelerated death benefit, which advances the death benefit for a terminal illness. The disability income rider typically has a waiting (elimination) period and pays for a defined benefit period.

Why the other options are wrong

• B) Waiving premiums is the function of the waiver of premium rider, a different rider.
• C) Advancing the death benefit for a disabling condition is not how a disability income rider works.
• D) The rider pays income; it does not increase the death benefit.

Memory hook

Disability income rider = salary replacement while disabled; waiver of premium just keeps the policy alive.

Why A is correct

The disability income rider pays a stated monthly benefit to the insured during total disability, typically after a short elimination period, while the underlying life insurance policy remains in force. It is a life insurance rider that provides income protection in addition to the death benefit. The rider is distinct from the waiver of premium rider, which only forgives premiums during disability. The benefit amount and the elimination period are chosen at issue and affect the rider's cost. This rider helps a disabled insured maintain income without reducing the life coverage.

Why the other options are wrong

• The rider pays monthly income; it does not automatically increase the face amount of the life insurance policy.
• Waiving premiums is the function of the separate waiver of premium rider; the disability income rider pays income instead.
• No rider pays the full face amount for a disability; the face amount is payable only at death under the life policy.

Memory hook

Disability income rider = a paycheck from the policy while you are disabled, on top of keeping life coverage alive.

Why A is correct

The disability income rider pays the insured a monthly income benefit if the insured becomes totally disabled, helping replace lost earnings while the life policy stays in force. It is distinct from the waiver of premium rider, which only forgives premiums during disability, and from the death benefit, which pays the beneficiary at death. Some disability income riders may also waive premiums as part of the package, but the defining feature is the income stream. It does not create a savings fund or accelerate the death benefit.

Why the other options are wrong

• B) Waiver of premium only forgives premiums during disability. The disability income rider, by contrast, pays the insured a monthly income during disability.
• C) The death benefit is paid to the beneficiary at the insured's death. The disability income rider pays the insured while alive and disabled.
• D) Cash-value accumulation belongs to the base permanent policy. The disability income rider provides income protection, not a savings fund.

Memory hook

Disabled and on the policy? The rider writes the income check, not just the premium waiver.