Xcel Life Policies Practice Exam

A policyholder can increase the protection benefits of a life insurance policy by adding riders or optional features. Riders are additional provisions that can be attached to a base life insurance policy, which enhance or modify the coverage provided. Examples of riders include accelerated death benefit riders, waiver of premium riders, and long-term care riders. These options allow the policyholder to customize their insurance coverage, providing extra benefits that cater to specific needs or circumstances, thus enhancing the overall protection offered by the policy.

For instance, an accelerated death benefit rider allows the insured to access a portion of the death benefit while still alive if diagnosed with a terminal illness. This can significantly increase the financial support available in times of need. Similarly, adding a waiver of premium rider ensures that if the policyholder becomes disabled, their premiums will be waived, maintaining the policy's coverage without requiring additional payments.

Considering other approaches discussed, extending the term length may provide coverage for a longer duration but does not inherently increase the benefits paid out. Reducing premium amounts typically results in lower coverage limits, and changing the insured individual would not enhance the benefits of the existing policy. Thus, adding riders is the most effective method to increase the protection benefits within the existing life insurance policy framework.