State RegulationsOH specificDifficulty 1/5
Which statement best describes a living benefit provision or rider in a life insurance policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Living benefit provisions - accelerated benefit riders - let the policyowner advance part of the face amount while the insured is alive upon qualifying events such as terminal illness or the need for long-term care. Ohio regulates these provisions under ORC 3915.21 and the accelerated benefit rule OAC 3901-6-06, and the amounts advanced reduce the death benefit ultimately paid.
Why the other options are wrong
- A) Living benefits are not dependent coverage and are not free; they advance the insured's own death benefit.
- C) Premium guarantees are unrelated to living benefit provisions.
- D) Conversion is a separate term-policy privilege; living benefits pay out part of an existing death benefit early.
Memory hook
Living benefits: spend the death benefit before the funeral.