Life Insurance Riders
Riders are benefits that can be added to an already existing policy. You purchase different ones to customize the coverage to your liking. The additions do cost extra so it is important to only choose the ones that you would truly benefit from. Here are some of the most common life insurance riders.
Guaranteed insurability– A guaranteed insurability rider allows you to purchase additional coverage at a later date without the need for a medical exam. These purchases may only be allowed during certain periods or when significant events occur, such as marriage, having a baby, etc. If you were to get sick later in life, you would be able to purchase extra coverage without having to prove your insurability.
Accelerated death benefit– The accelerated death benefit rider is now usually included in most policies for little to no cost. It allows you to receive a benefit payout in the event you are diagnosed with a terminal illness. It could be used to help with hospital expenses and such. The only thing to remember is that this payout may be subtracted from what your beneficiaries receive once you pass. You should also look into what your insurance company considers terminally ill because it varies.
Accidental death benefit– An accidental death benefit rider pays out an additional death benefit (usually double) to the family of the insured if they die as the result of an accident. It is a great option for those who work dangerous jobs and need the additional coverage to take care of their families when they are gone.
Family income benefit– If you are the sole breadwinner for your family, you may want to look into a family income benefit rider. This rider provides a consistent flow of income to the family when the policyholder dies. The insured must decide how long they want their family to receive the benefit when buying it.
Waiver of Premium– A waiver of premium rider allows you to stop paying your policy premiums if you become disabled and cannot work. Your policy would remain active just as if you were making the payments until you are back to working full-time. This rider may be tricky because the definition of disabled varies from carrier to carrier. However, it is a good option that will not let your policy lapse and keeps your family covered.
Return of premium– A return of premium rider is specifically for term life insurance policies. It allows you to receive all or a portion of all the premiums you have paid on your term policy if you outlive the term. If you die, your beneficiaries will receive the paid premium amount.
Life Insurance Questions?
We hope this information on life insurance riders is helpful.
If you’d like to learn how we can help you plan your retirement, call Empower Brokerage to speak to one of our Life and Annuity experts (888) 539-1633
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