What are Life Insurance Riders?
A basic life insurance policy is good, but it could always be better tailored to the particular needs of the policyholder. That is why they should always consider the necessary riders. Life insurance riders are benefits that can be added to a basic policy to customize the coverage to specific personal circumstances. Here are some of the most common examples of life insurance riders.
Guaranteed insurability– Purchasing additional coverage at a later time without a medical exam is what a guaranteed insurability rider provides. There are certain time periods when these purchases are allowed or only when significant life events occur, such as marriage, having a baby, etc. If the policyholder were to get sick later in life, they could purchase extra coverage without having to prove they are insurable.
Waiver of premium– If the policyholder were to become disabled and not able to work, a waiver of premium rider would allow them to stop making their premium payments. The policy would remain active as if they never stopped paying it, and it would do so until they returned to working full-time. The definition of disabled varies depending on the insurance provider, so it is advised to ask them about it. This rider is a good option, as it does not let the policy lapse and keeps the family protected once the policyholder is gone.
Family income benefit– The family income benefit rider is a good choice for those that are the sole breadwinners of their family. The rider provides a steady flow of income to the family once the policyholder dies. How long the benefit lasts is decided by the insured when they purchase it.
Return of premium– A return of premium rider is exclusively for term life insurance policies. If the policyholder outlives the term then they would receive all, or a portion, of all the premiums they have paid on the term policy. If they were to die, the beneficiaries will receive the paid premium amount.
Accelerated death benefit– This next rider is usually already included in most policies for little to no cost. The accelerated death benefit allows the insured to receive a benefit payout in the case that they are diagnosed with a terminal illness. How it is spent is up to the discretion of the policyholder, but it can serve to help with medical expenses and such. It is important to note that the payout will be subtracted from what the beneficiaries receive once the insured passes. Terminally ill is also a term that changes definition depending on the carrier.
Accidental death benefit– An accidental death benefit rider pays an additional death benefit, usually doubling the original amount, to the family of the policyholder if they were to die due to an accident. If someone works a dangerous job and needs extra coverage, it is a great option to leave the family protected.
Health Insurance Questions?
We hope this information on life insurance riders is helpful.
Empower Brokerage wants to help you understand the insurance coverage you need and how to save money getting it. Stay on top of your health and give us a call at (844) 410-1320
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