What Are Life Insurance Riders?
Life insurance riders are optional additions to a life insurance policy that provide supplemental coverage or benefits beyond the basic policy. They help personalize your insurance to better fit your needs and those of your loved ones.
Types of Life Insurance Riders
The availability of life insurance riders depends on the insurer and the specific policy you’ve chosen. Most riders can be added to both term and permanent life insurance policies, though details may vary. It’s essential to opt for riders when purchasing your policy, as they generally can’t be added later.
Common Life Insurance Riders Explained
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Accelerated Death Benefit Rider
- Available on most term and permanent policies
- Allows access to part or all of the death benefit while alive if diagnosed with a terminal illness
- Can be used for medical care and treatments
- Often included at no extra cost, but may have a fee for accessing the benefit
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Accidental Death Rider
- Increases payout to beneficiaries if death results from a covered accident
- Sometimes called “double indemnity” rider as it can double the payout
- Comes at an additional cost and has specific exclusions
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Child Term Rider
- Covers children under the policy instead of separate policies
- Pays a small death benefit if a child dies before reaching maturity age (usually 25)
- Can often be converted to a permanent policy for the child later
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Guaranteed Insurability Rider
- Allows purchasing additional coverage in the future without a medical exam
- Typically available on permanent life insurance policies
- Enables increasing coverage at specific intervals or life events
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Long-term Care Rider
- Permits accessing the death benefit while alive if chronically ill and unable to perform daily tasks
- Available on permanent life insurance policies
- Can be reimbursement or indemnity type
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Return-of-Premium Rider
- Refunds premiums if you outlive your term life insurance policy
- Available on term life insurance policies
- Can significantly increase premium costs
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Waiver of Premium Rider
- Pays life insurance premiums if you become totally disabled
- Available on both term and permanent life insurance policies
- Requires proof of disability and may have a waiting period
Other Available Riders
- Chronic illness riders
- Cost-of-living adjustment riders
- Critical illness riders
- Disability income riders
- Family income benefit riders
- Guaranteed renewability riders
- Overloan protection riders
- Paid-up additions riders
- Spousal insurance riders
- Term conversion riders
- Term insurance riders
- Transfer of insured riders
Choosing the Right Riders
When selecting life insurance riders, consider your potential future financial needs, such as managing chronic illnesses or providing coverage for dependents. Some riders offer significant value at little to no additional cost, making them worth considering for customized protection.
Frequently Asked Questions
What are life insurance riders?
Life insurance riders offer additional coverage to customize your policy, providing benefits like increased death benefits or coverage for specific conditions.
How much do life insurance riders cost?
Costs vary; some riders like accelerated death benefit may be free, while others increase premiums.
Are life insurance riders worth it?
They can be if you need customized coverage. Consider future financial needs like managing chronic illness or covering dependents.
