South Carolina Insurance Practice Exam

Which of the following is true regarding the waiver of premium provision in life insurance?

1. It is always automatically included

2. It may include conditions regarding disability duration

3. It only applies to individuals over 65

4. It is dependent on application approval

The correct answer is: It may include conditions regarding disability duration

The waiver of premium provision in life insurance is an important feature that allows policyholders to stop paying premiums if they become disabled and unable to work. Option B is accurate because the terms of this provision often include specific conditions regarding the duration of the disability. This means that to qualify for the waiver, the insured must meet certain criteria, such as being disabled for a specified period. The terms will outline how long the individual must remain disabled before they can stop premium payments without losing coverage. In contrast, the other options do not accurately describe the waiver of premium provision. It's not always automatically included in every life insurance policy, as it may be an optional rider that needs to be added. The provision is not limited to individuals over 65; it can apply to younger individuals who become disabled. Additionally, while the quality of the application can impact coverage, the waiver of premium itself is not contingent solely on application approval; it functions under specific guidelines set forth in the policy regarding disability.