California Life and Health Insurance Practice Exam

The premium waiver rider is designed to provide financial relief to the policyholder in the event of a disability. This rider ensures that if the insured becomes disabled and is unable to work, the insurance company will waive future premium payments for the duration of the disability or until the insured can return to work, depending on the specific terms of the rider. This protects the policyholder from losing their insurance coverage due to financial difficulties stemming from their disability.

The other scenarios do not activate the waiver rider because they do not relate to the insured's inability to earn income due to a disability. Skipping a payment could lead to policy lapsing, while reaching retirement age and canceling the policy do not involve the condition of disability which the rider is specifically designed to address.