Massachusetts Health & Accident Insurance Practice Exam

What type of rider provides additional income when the insured is eligible for Social Security benefits?

1. Cost-of-Living Adjustment Rider

2. Social Security Rider

3. Exclusion Rider

4. Guaranteed Insurability Rider

The correct answer is: Social Security Rider

The Social Security Rider is designed to provide additional income coverage to individuals who become eligible for Social Security benefits due to disability. This rider typically offers a supplementary benefit to help bridge the financial gap that may arise during the waiting period before Social Security benefits begin or to enhance the overall financial support the insured receives. When a policyholder becomes disabled, there is often a waiting period before Social Security Disability Insurance (SSDI) payments kick in. The Social Security Rider compensates for this lag by ensuring the insured receives a predetermined amount of benefit during this time. This can help alleviate financial stress and provide critical support for living expenses, medical costs, or any other financial obligations. Other types of riders serve different purposes. For example, the Cost-of-Living Adjustment Rider increases benefits over time to keep pace with inflation, while the Exclusion Rider specifies certain conditions that are not covered by the policy. The Guaranteed Insurability Rider allows the insured to purchase additional insurance coverage without proof of insurability, but it does not provide additional income related to Social Security eligibility. Thus, the Social Security Rider is specifically tailored to enhance income in conjunction with Social Security benefits, making it the most suitable option in this scenario.