Purchasing life insurance is an important step in securing your family’s financial future. It can help your loved ones when you are gone and pay your final expenses. You can take your policy a step further by adding supplemental benefits using amendments known as riders.
Riders can help you modify your life insurance to better suit your needs and allow you to opt for additional benefits not typically included in basic policies. Consider the following popular riders available on some life insurance policies:
Waiver of premium:
According to the New York Department of Financial Services, this rider provides that your policy will stay in place if you become totally disabled before a specified age (usually age 60 or 65) and are unable to continue paying your premiums. The premium waiver rider can pay up to a certain dollar amount, allowing you to keep policy benefits, including cash values and/or dividends. Total disability is defined by the terms of the rider.
Accidental Death Benefit:
According to InsuranceInDepth.com, this rider, also known as “double indemnity,” ensures an additional payment amount for the policy beneficiary in the event the insured is killed in an accident. However, pay close attention to your insurer’s definition of “accidental” death. Only accidents that meet the definition can be covered by this benefit.
Accelerated death benefit:
This type of rider can pay a portion of your benefits before your death and is triggered by certain events, such as a terminal illness, according to the Missouri Department of Insurance. This can help you cover expenses like long-term care, but be aware that it can reduce death benefits.
Additional guaranteed insurability clause:
According to the New York Department of Financial Services, this rider allows you to purchase additional coverage at specified time intervals, up to a certain age (usually 40) without providing evidence of your insurability. That means you have the opportunity to get additional coverage based solely on your age and regardless of your health or other factors that insurers often consider. These riders may also include specific life event triggers, such as marriage or the birth of a child that allow policyholders to purchase additional coverage.
Temporary additional clause:
Do you need additional coverage for a limited period of time? According to the New York Department of Financial Services, temporary riders can be attached to existing policies to adjust the level of coverage for a specified period of time. Temporary riders can be useful as a means of acquiring additional protection during your career.
Additional clause for spouse and children:
These riders will provide temporary (not permanent) coverage on the life of your spouse or children. A conversion provision in the rider allows the spouse or children’s policy to be converted into a permanent policy without showing proof of insurability, says the New York Department of Financial Services.
Additional provision clause for automatic premium loan:
Whoops! Forgot to pay your premium this month? This rider will automatically pay your premium by borrowing the cash value of your policy, in the event you miss your payment by the end of the monthly grace period. The New York Department of Financial Services suggests this rider for those who feel they may inadvertently forget to make their payments. The policyholder may cancel this rider at any time.
These popular riders offer a good starting point if you’re considering amendments to your life insurance policy. Keep in mind that some riders must be added when a policy is issued, and others can be added at any time. A life insurance agent can provide more details and help you determine which riders might work best for you.
