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Life Insurance Policy Riders
Article 3 of 5 in Understanding Your Life Insurance Policy
Once you have decided that you are going to buy the best life insurance plan possible to insure your family's financial future, getting the best coverage is paramount. Adding a life insurance rider to your basic policy can help accomplish this goal. A life insurance rider is supplemental coverage which can be added to your policy to give you more coverage or extend the policy benefits. Depending on your individual goals or needs, riders can add extra protection that can be extremely useful. There may be some restriction on certain riders like your age or health, but the majority of life insurance riders can be purchased for a little extra premium payment. They vary from insurance company to insurance company and also vary in price.
TIP: A rider to your life insurance policy can be extremely important! It is important to ask an agent what riders would be best for your needs.
Perhaps you would like your family to get an extra payment if you should die suddenly in an accident---there is a rider for that! Or maybe you think it would be helpful to be able to access your life insurance death benefit BEFORE you die in the event you were to become terminally ill--there is a rider for that too! Discuss some of your greatest concern with a reputable agent and ask if there is a rider that will eliminate any coverage gaps you may have. The extra premium may be worth the peace of mind!
Common Life Insurance Riders
Below are some of the more common riders that you can add to your policy. Make sure you discuss these and any others with your life insurance agent. Compare the cost of adding one of these riders to your overall need to have the coverage. A good agent should be able to help you with this choice should you have any specific questions:
- A spousal rider effectively converts a single-life insurance policy into a multiple-life insurance policy, providing coverage for both you and your spouse.
- A child rider works like the spousal rider but extends coverage to an offspring rather than to a spouse.
- A return of premium rider (ROP) effectively converts an ordinary term life insurance policy into ROP life insurance. At the conclusion of the term of coverage, if the insured is still alive, the policy owner is remitted the sum of all his premium payments.
- A waiver of premium rider stipulates that your insurance company will waive your premiums in the event that you become disabled.
- Guaranteed Insurability rider guarantees the right to purchase additional life insurance on specified dates. The rates will be based on the attained age of the insured.
- Level Term Rider provides extra term life insurance protection for a specific amount of time.
- Long Term Care Rider pays benefits if the insured meets defined policy eligibility criteria (e.g. confined to a long term care facility). The maximum benefit is generally a percentage of the life insurance policy's face amount. The death benefit will be reduced by the amount paid out under this rider.
- Mortgage Protection rider provides an additional decreasing term life insurance benefit, for the length of the insured's mortgage.
- Accidental Death Benefits rider increases the death benefit paid if the insured dies as a result of a specific type of accident defined in the policy
- Accelerated Death Benefit rider pays out a portion of the death benefit if the insured person is diagnosed with a terminal illness
- Disability Income Rider- This rider provides a monthly benefit check in the event you become disabled.
- Term Conversion Rider -This rider lets you convert term life insurance into permanent life insurance without undergoing a medical exam. There will be a deadline for when you must convert, if you want to change the term policy to permanent life insurance without providing health information.
Which life insurance rider you choose really depends on your individual family health history or your individual family goals. Perhaps you have a strong family history of cancer. It might be best to consider the accelerated death benefit rider or even the waiver or premium rider. Both would help in the event you were to contract the disease. If your main financial goal was to make sure you leave your family mortgage free, perhaps adding the mortgage protection rider might give you the extra added coverage needed. Ask a Life Insurance Agent which rider would be best for your needs and your budget. When you have identified what riders you need in your life insurance policy, shop and compare quotes with the riders included before you purchase a policy.
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