Figuring out the type of life insurance policy to buy can be tricky.
That process becomes even more complicated when you factor in life insurance riders.
But it doesn't have to be:
Today, we will be answering all your questions in regards to insurance riders.
Whether you’re looking to purchase life insurance for the first time or trying to determine whether you need to add a rider to your existing policy, this guide is for you.
What Is a Life Insurance Rider?
A life insurance rider serves as a provision that you can purchase to add-on or strengthen your existing life insurance policy.
These riders concern circumstances not covered in the basic life insurance plan, such as accidental death, disability, return of the premium, and other stipulations.
What a life insurance rider will cover varies by the type, below we discuss the different options.
Guaranteed Insurability Rider
This rider gives you the flexibility to purchase additional life insurance at specific points throughout your life without undergoing the underwriting process.
Typically, you’re given that option every 3 to 5 years or after a major life event, such as a marriage or the birth of a child.
The biggest advantage of a guaranteed insurability rider is that if your health declines later in life and you want to increase your coverage.
Also, any pre-existing conditions can’t be used as a factor to deny you the additional coverage—you’re guaranteed insurability.
Accidental Death Rider
As you might suspect, an accidental death rider applies if you die in an accident, either due to an injury or drowning.
This rider pays out an additional benefit to your beneficiary on top of any life insurance policy death benefit that you have purchased.
However, you must pass away within 90 days of the accident for the rider to take effect. You should look into an accidental death rider if:
Waiver of Premium Rider
Aptly named, a waiver of premium rider waives all premiums if you become disabled after acquiring life insurance and are no longer able to work.
This means you don’t have to pay a monthly premium during this time.
The waiver of premium rider remains in effect as long as you remain disabled, though you may have to meet certain criteria to qualify for the rider, such as loss of sight or the use of your hands or feet.
Family Income Benefit Rider
Many people purchase life insurance when they are young and single, but what about adults who are concerned about supporting their growing families?
With the family income rider, you can rest easy, knowing your family will receive financial support after your passing.
The family income rider adds a term life policy on top of the existing whole life policy.
In the event of your death, your family receives a monthly sum—in addition to the standard, one-time death benefit—until the term life policy expires.
Accelerated Death Benefit Rider
When browsing life insurance riders, accelerated death benefit riders are one of the most important to keep in mind. An accelerated death benefit (ADB) rider permits you to receive a portion of your life insurance while you are still alive.
This rider gets its name from the fact that the policy technically ‘accelerates’ the release of the death benefit so that it can be disbursed during your lifetime. The accelerated death benefit rider can pay for expenses like hospitalization, medication, end-of-life care, and so forth.
To qualify for ADB, you generally must have a terminal illness with fewer than six months to live or a qualifying disability. This rider can also be further broken down into a few different riders which are the:
Child Term Rider
A child term life insurance rider, also known as a children’s term rider, pays a death benefit in the tragic event of a child’s death.
You must take out the rider on a specific child or multiple children. Biological, stepchildren, and adopted children all fall under this provision.
To qualify, the child must be:
A child term rider can help pay for costs such as funeral expenses or hospital bills.
Long-Term Care Rider
As average life expectancy increases, more Americans are turning to long-term care (LTC) riders.
If you’re suffering from a chronic illness and receiving long-term care, this rider allows you to take money from your life insurance policy and apply it to your caregiving needs.
How does the long-term care rider work? The rider essentially “accelerates” the death benefit, much like the accelerated death benefit rider.
This is a type of rider that can usually only be added when you first buy your policy so be mindful if this option is available.
You can only file a claim on a long-term care life insurance rider if:
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Return of Premium Rider
A return of premium rider does just that... it returns your premiums at the end of the term.
The rider attaches to a standard term life insurance policy and allows for the refund—or return—of all your premiums if you live past the term of your life insurance policy.
(Note: the return of premium rider is different from a waiver of premium rider discussed previously.)
You should consider purchasing a return of premium rider in the following cases:
How to Remove a Rider
The process to remove a rider varies by provider, but in all cases, the easiest route is to contact your insurance agent or the insurance company directly.
Often, all that’s required is a simple form to fill out and send back in.
Taking Action
Life insurance riders may make the process of acquiring insurance a little more stressful upfront.
However, in the long run, they may reduce stress by offering flexibility and foresight for unanticipated events or significant expenses.
If you need life insurance, you can get immediate quotes and coverage by clicking here or on any of the above buttons.