Question

22 akhtar had a $100,000 critical illness insurance policy covering the three basic conditions with the return of premium (rop) rider. he made a claim after a cancer diagnosis, but died during the 30 - day waiting period. he had named his brother, abu, as the beneficiary. what outcome can be expected with regard to the policys benefits?
a. abu will receive $100,000 plus a refund of the premiums paid.
b. abu will receive a refund of the premiums paid.
c. abu will receive nothing as akhtar did not survive the 30 - day period.
d. abu will receive a lump - sum payment of $100,000.

Explanation:

In critical illness insurance with a return of premium (ROP) rider, the ROP rider typically refunds premiums if the insured doesn't survive the waiting period (or certain conditions). Akhtar died during the 30 - day waiting period after claiming for cancer. The $100,000 benefit is for the critical illness claim, but since he didn't survive the waiting period for the claim to be valid for the illness benefit, but the ROP rider would refund premiums. Option a is wrong as the $100,000 isn't paid (waiting period not survived). Option c is wrong as the ROP rider should refund premiums. Option d is wrong as the waiting period means the illness benefit isn't paid. So Abu gets a refund of premiums paid.

Answer:

b. Abu will receive a refund of the premiums paid.