Juvenile Life Insurance

A juvenile life insurance policy:

1. A.Has no ownerEvery policy has an owner who holds the contractual rights. With juvenile coverage the whole point is which party holds them: the adult applicant rather than the insured child.
2. B.Insures a child and is owned by an adultCorrect - child insured, adult owner.
3. C.Is a group retirement planTwo category errors at once. Juvenile coverage is individually issued rather than group, and it is life insurance rather than a retirement vehicle; a parent owning it does not make it employer-sponsored.
4. D.Insures an adult, owned by a childReverses both roles. A minor generally lacks the capacity to contract, so a child cannot validly own the policy; the child is the insured and the adult is the owner.

Why: A juvenile policy insures the life of a child and is owned by an adult, typically a parent or guardian.

A 'JUMPING JUVENILE' policy purchased on a 5-year-old provides that at age 21, the face amount:

1. A.Increases automatically (commonly fivefold) without new underwriting or premium increaseCorrect. The pre-funded jump defines the product.
2. B.Decreases to reflect adult mortalityWrong. The design INCREASES coverage entering adulthood.
3. C.Converts to term insurance at adult ratesWrong-but-tempting. No conversion event occurs - the whole life contract simply grows.
4. D.Is paid out as an endowmentWrong. Endowment maturity is a different design entirely.

Why: Juvenile estate-builder policies increase the face (typically fivefold) at the trigger age with no underwriting and no premium change, locking lifetime insurability economics at children's rates. Citation: juvenile policy design. Takeaway: the face jumps at 21 - premium and insurability stay untouched.

A juvenile life policy includes a payor benefit rider. If the premium-paying parent dies or becomes totally disabled, the rider provides that...

1. A.The child must immediately prove insurabilityThe rider requires no new evidence of insurability from the child.
2. B.The child's policy is immediately cancelledThe rider preserves coverage rather than cancelling it.
3. C.Premiums are waived until the child reaches a specified ageCorrect — the payor benefit keeps the child's coverage in force by waiving premiums.
4. D.The death benefit is paid out to the parent's estateNo death benefit on the child is triggered; premiums are simply waived.

Why: The payor benefit rider waives the policy's premiums if the premium-paying adult dies or becomes totally disabled, keeping the child's coverage in force until the child reaches a specified age.