Life Insurance Riders Supplement Basic Coverage

When a person becomes independent in life and they become financially stable, life insurance is often a consideration, and rightly so. As soon as a person starts a family, the need for the protection that insurance provides becomes even greater.

Before jumping into a lengthy policy it is essential that you know exactly how much coverage you require, as many people have excessive insurance which drains their income unnecessarily. One way to save on your policy is to get a life insurance rider at a good rate. These provide protection in several ways once the conditions of the rider are met.
Here we will describe the various available riders and discuss the benefits for life insurance buyers.

A definition of an insurance rider:

Riders are supplementary benefits that can be bought additionally to a basic insurance plan to embellish the policy. These riders allow you to tailor your plan according to your insurance requirements. A rider will be an additional expense to your existing plan, but premiums are fairly low because they don’t require much additional underwriting.
Once a claim is made, the rider is often terminated and you are reverted back to your basic insurance. Another rider may be purchased if required. All of a rider’s attributes, such as rates, terms and amount of coverage are subject to change from one insurer to the next.

The most popular life insurance riders explained:

Double Indemnity Life Rider Insurance

Often referred to as ‘accidental death insurance’, this rider covers you for accident related death. The amount of benefit paid out is usually the same as the face amount of the policyholders basic plan, thus benefit is doubled (hence the term ‘double indemnity’). It’s important to understand the parameters of this type of policy in as much as what the insurance provider considers to be an actual ‘accident’.z

Spouse Life Rider Insurance

These are designed to offer your partner term life insurance on your basic policy for a relatively small sum.

Renewal Provision Rider Insurance (Guaranteed Insurability)

This gives you the freedom to add to your existing policy within a given period without having to partake in another paramedical exam. If your lifestyle or circumstances change, you may need to update your basic plan and guaranteed insurability riders are a solution. These are also handy if you have health issues mid-way through a policy and need extra coverage without having to give supporting evidence of your health status. Often this rider will end once the insured reaches a designated age.

Family Income Benefit Life Rider Insurance

This rider provides a steady income to beneficiaries should the policyholder die. Before buying, you will need to specify the term for which they will receive these benefits and premiums are calculated accordingly.

Waiver of Premium Life Rider Insurance

As the name suggests, with this insurance rider, premiums are waived once the policyholder expires, becomes permanently disabled or becomes unable to work for an extended period. This gives the policyholder time to recuperate without the fear of defaulting on their policy when they experience a loss of income. Once again, parameters may vary, so it’s important to know exactly what the insurance company view as ‘disabled’.

Child Term Life Rider Insurance

This will insure a policyholder’s child should they die at an early age. This has the benefit of being able to convert into a permanent policy with no exam, once the child matures.

Long Term Care Life Rider Insurance

This rider enables policyholders to receive monthly benefits should they require long term care at any point in their life. This includes home or hospice care or residential home assistance.

Accelerated Death Benefit Life Rider Insurance

If a policyholder is diagnosed with a terminal illness, they can use this rider to receive a significant portion of their death benefit (often as much as 40%). This usually means that your beneficiaries will receive less once the percentage plus interest is deducted from your benefits once you expire. The nature of this rider means it is very good value and often free, but it is essential to know what qualifies as ‘terminal illness’ before you buy.

Return of Premium Life Rider Insurance

Once your policy expires or you come to the end of your life, you can use this rider to claim back a large portion of your life insurance policy premiums. Your beneficiaries will receive their share of premiums paid. Make sure you research policies before buying as benefits, terms and conditions often vary.

Life Insurance Riders: Conclusion

It is essential that you understand the provisions of your life insurance policy. This is your responsibility and it will protect your best interests to do so. Once a policy is bought, it may be difficult or expensive to modify it. This is why it’s important to discuss riders with your agent as a means of adding flexibility to your policy. Nobody knows your insurance requirements better than you, so you can save money, achieve peace of mind and secure your family financially at a relatively little expense.

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