What is a Payor Benefit?
Payor benefit is a term commonly used in life insurance policies. Certain events that limit the policyholder’s ability to pay premiums — such as disability, death, and unemployment — trigger this benefit. The payor benefit provides financial assistance by covering the policy premiums on behalf of the policyholder. This ensures that the policy remains in force and the policyholder continues to receive the benefits of the policy. The payor benefit is typically designed to protect the interests of the policyholder and the insurer by ensuring that the policy does not lapse and that the insurer continues to receive premium payments.
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