A standard life insurance policy may not fulfill the needs of every family. Fortunately, there are additional coverages called "riders" that can be added to your life insurance policy to enhance coverage to meet your specific needs. Once you've determined the type of policy that you wish to purchase, term or whole life, then you can take a look at filling any potential gaps with a policy rider. Here are just six of the most common riders and the ways that they can customize your life insurance coverage.
Waiver of Premium Rider
Insurance policies require the payment of a premium, most commonly annually or monthly, to remain in force. If you become disabled or lose your income as a result of illness or injury, this rider can protect your policy by waiving premium payments until you get back on your feet.
Disability Income Rider
Going a step further, if you become totally disabled and can't work, a disability income rider can offset your lost wages. This rider will specify a wage benefit that will be paid to you monthly if you are unable to work. In essence, this can replace a separate long-term disability insurance policy but the benefit may not last as long as an LTD policy so be sure to read the fine print.
Guaranteed Insurability Rider
This important rider allows you to purchase additional insurance coverage at a later date without having to provide evidence of insurability. This means that you won't have to undergo another medical exam and only your age, not your current health, will be used to determine premiums for new coverage.
Accelerated Death Benefit Rider
An Accelerated Death Benefit rider will become valuable if you end up with an illness that could significantly shorten your lifespan. If you have this contract addition, you can get an advance on your death benefits of anywhere from 25%-40% that can be used for anything you wish. This rider is now offered by many insurance companies either for free or for a very nominal charge.
Some insurance policy riders will protect you in case of death or disability due to an accident.
Accidental Death Benefit Rider
Also sometimes called a "double indemnity" rider, this clause states that if you die from an accident, there will be an additional death benefit on top of the policy's stated limits. Insurers will often charge higher rates for this rider if you have a hazardous occupation or engage in high-risk hobbies.
Return of Premium Rider
The purpose of this rider is to return all or most of the paid premium to you if you live until the end of your policy term. You may pay a higher premium when using this rider so be sure to weigh its potential benefits before making a decision.
Purchasing life insurance can be both confusing and intimidating. In fact, studies show that many people don't purchase life insurance precisely for this reason. The other common reason for not moving forward is a misconception about cost. Even with some of these riders, a life insurance policy is surprisingly affordable and provides the peace of mind and financial security that your family needs. Contact us to discuss your options with one of our experts or to start a quote.