Life insurance is the best thing that you’ll ever buy for your family. It’s one of the best ways to ensure that your loved ones will be taken care of, regardless of what happens to you. While life insurance provides protection, there are some holes that aren’t covered by basic life insurance plans.
Life insurance policy riders are a great way to enhance any life insurance policy at a nominal cost. Each rider will increase your premium by a certain amount, but in return could benefit you and your policy greatly. In order to take advantage of a life insurance policy rider you’ll have to do add them during the application process and can’t add any riders after you have finalized a policy.
It’s vital that you get all of the protection that your family deserves, and sometimes you’ll need to add additional riders to get that coverage. There are dozens of different rides, but here are some of the most common.
- Accidental Death Benefit Rider
This rider adds a clause to your policy that pays an additional death benefit on top of your policy’s stated death benefit, only if your death occurred due to an accident. If your death is due to a natural cause (not an accident) then the accidental death benefit rider does not pay a benefit but your standard policy death benefit will pay out to your beneficiary(s). This rider should be considered by people who work in or around hazardous environments. Typically this rider ends when the insured turns the 70 years old.
- Waiver of Premium Rider
This is one of the oldest and most popular policy riders in the books. What this rider does is waives the policyholder’s obligation to pay the policy’s premium should them become disabled due to sickness or injury. If you can’t work due to a disability, you can still benefit from the policy without having to pay the premium. Once you are no longer considered disabled you must continue making premium payments. Depending on the life insurance company this rider may have certain stipulations such as elimination periods (minimum disability period before the benefit kicks in, from one to six months), etc.
- Accelerated Death Benefit Rider
The accelerated death benefit is a great policy rider. How this rider works is that if you are deemed to be terminally ill, the life insurance company will pay the insured individual cash advances against the policy death benefit to use for treatments and expenses while still alive. This benefit began in the 1980’s to alleviate the financial pressures those diagnosed with AIDS were facing.
This is one of the most beneficial riders that you can purchase to go with your life insurance plan. Medical bills and other expenses can quickly add up and put serious financial strain on your family. It’s your life insurance policy, you should be able to access it when you need it most.
- Long-Term Care Rider
This is a great rider for individuals who are in the market for life insurance and are interested in preparing for long term care needs. Although this rider is not a replacement for an actual standalone long term care policy, it can help with alleviating some of the financial pressure experienced with long-term care needs. The long-term care rider provides an acceleration of the life insurance policy death benefit to help pay the costs associated with long-term care. Some riders allow the benefits accelerated to you to be used for other expenses and not just those associated directly to long-term care costs. Typically the insured selects a percentage of their death benefit they want accessible in the event of the need for long-term care (between 10% and 100% of the policy face value). Keep in mind that the acceleration of the benefit reduces both the policy death benefit and cash surrender values.
- Disability Income Rider
This rider allows you to collect regular income from the life insurance company if you become totally disabled, and are unable to work. The policy rider will specify how much income you can receive and how long the benefit period is. Some disability income riders will only payout if the disability is to do an accident, while others will pay if the disability is due to an accident or sickness.
- Guaranteed Insurability Rider
This rider allows you to purchase additional life insurance coverage at a later date without the need to undergo a medical exam to prove your health and insurability. Due to you never knowing how your health could change in the future, it may make sense to add this rider to your policy if you think you may be in the market for additional life insurance in the future. This rider allows you to purchase additional coverage down the road at certain intervals, such as every three years, or at certain ages. When it comes time to purchase additional coverage your age is taken into consideration to determine the cost of the coverage and not your health.
- Child Protection Rider
No one wants to think about the possibility of losing a child. Although the death of a child would not result in the loss of income for a family, the financial burden of final expenses while mourning your loss could bring additional hardships to the family. The coverage is generally purchased in units, where one unit equals $1,000 of coverage on your child. Ten units would equal $10,000 of coverage on your child.
This can help you recover during the grieving period of losing your child. This will give you time to go through the process without having to rush back to work and help you pay for any final expenses or medical bills.
- Return of Premium Rider
The return of premium rider, often called return of premium life insurance, does exactly as it says; it allows you to get a return of the premium you paid into your plan when your coverage ends. The trade off is that you’ll pay extra in premiums to acquire that benefit. Who doesn’t like the idea of getting their money back on their life insurance if they didn’t need it?
In order to get a better understanding as to how these riders work and whether or not they’re worth your time and money, feel free to give us a call and we’ll be happy to answer any questions you have. If you’re interested in getting some life insurance quotes complete the request form you see on this page.
If you have any questions about life insurance or any of the additional riders, please contact us today and we would be happy to answer those questions. We are dedicated to helping you get the best protection to fit the needs of you and your family.
As independent agents, we represent dozens of highly rated companies across the United States and can save you both time and money when looking for your life insurance plan. You could spend weeks looking for the best life insurance to fit your needs, or you can let us do all of the work for you.