Chartered Life Underwriter Exam 2025 – 400 Free Practice Questions to Pass the Exam

A "waiver of premium" rider is a valuable feature found in many life insurance policies that protects the policyholder in the event of disability. When policyholders become disabled and cannot work, this rider enables them to skip premium payments without risking the loss of their policy. The insurer agrees to cover the premium payments during the period of disability, ensuring that the policy remains in force even though the policyholder is unable to pay. This feature provides financial relief and peace of mind, allowing individuals to focus on their recovery without the added worry of maintaining their insurance coverage.

The other options do not accurately describe the functionality of the waiver of premium rider. For example, the rider does not allow for reduced premiums during the policy term or enable transferring ownership of the policy. Additionally, while it provides protection against premium payments during disability, it does not extend coverage without cost in the same manner. Thus, the correct understanding of the waiver of premium rider emphasizes its role in maintaining coverage during periods of financial hardship caused by disability.