Kage 45, and his wife, age 43, have three children. They purchase a Family Policy that covers K’s wife to age 65. All of these situations will pay a death benefit EXCEPT
A K’s wife dies at age 60
B K’s wife dies at age 66
C A child dies at age 15
D A child dies at age
The correct answer and explanation is :
Correct Answer:
All of these situations will pay a death benefit EXCEPT if one of the children dies after reaching the maximum age covered by the policy.
Explanation:
A Family Life Insurance Policy (also known as a Family Term Rider) typically includes the primary insured (often the wage earner), a spouse term rider, and children’s term riders. These policies are designed to provide affordable life insurance coverage to all immediate family members under a single policy.
Let’s break down the key components of such a policy to understand why the death of a child after reaching the age limit would not be covered:
- Primary Insured (Kage, age 45):
He is covered until the end of the term specified in the policy or until the policy is canceled or converted. If Kage dies while the policy is active, a death benefit is paid. - Spouse Rider (Wife, age 43):
She is covered until age 65, as per the policy mentioned. If she passes away before reaching age 65 and the policy is in force, the death benefit will be paid out. - Children’s Rider:
This typically covers all dependent children from a few days after birth up to a certain age (usually age 21 or 25, depending on the insurer). Coverage for children is generally a small fixed amount and may be the same regardless of how many children are in the family. However, once a child reaches the maximum age limit (e.g., 25 years), they are no longer covered under the policy. If they die after reaching this age limit, the term rider coverage has expired, and therefore no death benefit will be paid. - Death of Children While Covered:
If a child dies before reaching the age cutoff, the policy would pay the small death benefit associated with the children’s term rider.
Conclusion:
The only situation in which no death benefit would be paid is if a child dies after reaching the age limit for coverage under the policy. All other family deaths within the covered terms would trigger a death benefit payout.