Massachusetts Health & Accident Insurance Practice Exam

What does the Return of Premium Rider guarantee upon the insured's death?

1. Only the face amount of the policy

2. Sum of all premiums paid plus the face amount

3. Additional benefits only if the insured was under 30

4. No extra payout

The correct answer is: Sum of all premiums paid plus the face amount

The Return of Premium Rider is an additional feature that can be added to a life insurance policy, which guarantees that upon the insured's death, the beneficiaries will receive not only the face amount of the policy but also the total sum of all premiums that have been paid during the policy's term. This rider is particularly appealing to policyholders because it offers a return on the premiums they have invested, effectively providing a financial safety net. The primary benefit of this rider is that it adds value to the policy by ensuring that the total amount paid into the policy will be returned along with the death benefit. This can provide a sense of security for policyholders, knowing that if the worst happens, their loved ones will receive a more substantial financial payout that reflects both the insurer's commitment and the policyholder's investment. This option directly relates to the nature of the Return of Premium Rider. The other options either suggest a payout that is less than what is guaranteed or impose conditions that are not relevant to the rider itself, making them unsuitable in this context.