South Carolina Life and Health Practice Exam

What option allows a whole life policyowner to add coverage for dependents?

1. Child term rider

2. Additional insured rider

3. Family coverage rider

4. Dependent life rider

The correct answer is: Child term rider

The child term rider is the correct choice because it specifically allows a whole life policyowner to add term insurance coverage for their children. This rider provides a set amount of coverage for each child, which can help alleviate financial concerns related to the loss of a dependent. It typically covers children at a low additional premium and provides a defined benefit payable to the policyowner in case of the death of the insured child. This form of additional coverage can often be converted to permanent insurance without underwriting if the child reaches a certain age, creating long-term value for the policyowner. While the other options mention riders related to additional coverage, they do not specifically address the inclusion of coverage for dependent children in the same manner as the child term rider does. Therefore, the emphasis on dependents, particularly children, distinguishes the child term rider as the most appropriate choice for providing this specific coverage within a whole life policy.