To determine the correct response for a life insurance policy that includes a return of premium rider, let's break down what this rider entails.
A return of premium rider is an additional feature that can be added to a life insurance policy. Essentially, it ensures that the policyholder or the policyholder’s beneficiaries receive a refund of the total premiums paid over the life of the policy under specific conditions.
Here is what each option means:
1. Total premiums paid plus the policy face amount: This means the beneficiary will receive the sum total of all premiums paid over the life of the policy in addition to the full face value of the policy.
2. Face amount plus interest accrued: This would mean the beneficiary receives the face value of the policy and any interest that has been accrued over time.
3. Interest accrued plus total premiums paid: This means the beneficiary would derive the sum of all premiums paid plus any interest accrued over the policy period.
4. Face amount minus any outstanding loan balances: If the policyholder had taken out loans against the policy, this option would deduct those loans from the face amount before paying the beneficiary.
With a return of premium rider, the purpose is specifically to return the total premiums paid. Hence, when the insured person passes away, the beneficiaries receive both the accumulated premiums and the face amount of the policy.
Therefore, the correct response is:
Total premiums paid plus the policy face amount.
So, the correct choice is the first option:
Total premiums paid plus the policy face amount.
