Life License Qualification Program (LLQP) Practice Exam

Which provision ensures that premiums are waived if a juvenile life policy owner becomes disabled?

1. Family Maintenance clause

2. Payor clause

3. Assignment provision

4. Automatic Premium Loan provision

The correct answer is: Payor clause

The provision that ensures premiums are waived if a juvenile life policy owner becomes disabled is the payor clause. This clause serves as a safeguard for juvenile life insurance policies where a parent or guardian, as the payor, is responsible for paying the premiums. If that individual becomes disabled or unable to work, the payor clause comes into effect, allowing the policy to remain active without the need for premium payments during the period of disability. This provision is particularly important for juvenile policies, ensuring that coverage continues without financial strain on the family during challenging times. The family maintenance clause is unrelated to premium payments during disability, focusing instead on maintaining a policy's benefits for beneficiaries in the event of the insured's death. The assignment provision deals with transferring ownership rights of the policy and does not secure premium payments. The automatic premium loan provision allows for an automatic loan against the policy's cash value to cover unpaid premiums, but it does not generate a waiver of premiums due to disability. Each of these options serves distinct purposes, with the payor clause specifically addressing the scenario of premium payments in the context of a caregiver's disability.