South Carolina Life and Health Practice Exam

What happens if the insured recovers from their disability in a waiver of premium provision?

1. Only past premiums are refunded

2. All future premiums are waived

3. The policy is automatically terminated

4. Premiums resume as normal

The correct answer is: Premiums resume as normal

In a waiver of premium provision, if the insured recovers from their disability, premiums will resume as normal. This provision typically applies when an insured becomes disabled and is unable to work; during that period, the insurer waives the requirement to pay premiums. Once the insured recovers and is able to return to work, the specified provision ends, and the insurer will start requiring premiums to be paid again according to the original policy schedule. This mechanism ensures that the policy remains active during the period of disability, but it clearly stipulates that once the insured's condition improves, they return to their normal payment obligations to maintain the coverage.