PSI Ohio Insurance Practice Exam

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Study for the PSI Ohio Insurance Test. Use flashcards and multiple choice questions with explanations. Get ready to ace your exam!

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What does the waiver of premium provision or rider do?

Allows for a reduction in premium costs
Waives the premium after the insured is disabled for a specific period
Cancels the policy after a certain period
Increases premium costs after a claim

The correct answer is: Waives the premium after the insured is disabled for a specific period

The waiver of premium provision or rider is designed to provide financial relief to policyholders who become disabled and are unable to make their insurance premium payments due to their condition. When this provision is in place, it specifies that if the insured is disabled for a predefined period, the insurance company will waive the requirement for the insured to pay the premium. This ensures that the policy remains in force even if the insured cannot work and generate income, thereby safeguarding their coverage during challenging times. This provision is particularly valuable because it mitigates the risk of losing essential insurance coverage due to financial distress caused by disability. Thus, it serves as a protective measure that supports the insured's financial stability while maintaining the benefits of their policy.