August 18, 2021
Life Insurance Riders: Providing Additional Protection to Your Loved Ones
Life insurance riders are extra benefits you can add to your insurance policy. They allow you to customize your policy to ensure your family is well-protected from any risks you may be worried about.
What Is a Life Insurance Rider?
Sometimes referred to as an endorsement, a life insurance rider is a provision that can add benefits to your policy. You can typically choose from a list of life insurance riders that your insurance company offers, adding the specific coverage you think your family might need.
How Does a Rider for Life Insurance Work?
If you want to customize your life insurance policy to make sure it has the exact coverage you need, you should consider adding some life insurance riders. You can ask your insurer which riders are available, paying attention to what each one covers and what the extra cost for the rider will be. Keep in mind that while some life insurance riders are included at no extra charge, some do cost extra money and will therefore raise your premium.
What Are the Different Types of Policy Riders?
The life insurance riders available to you may vary depending on your insurer, but in most cases, you can choose from the following:
Accelerated Death Benefit Rider
This rider lets you access the funds from your policy during your lifetime. For this reason, it’s also called a Living Benefit Rider. It’s typically used by people who have been diagnosed with a terminal illness so they can use some of the money in their policy to pay for medical treatment or make funeral arrangements before they pass away. This rider is usually offered on some policies free of charge up front, but the amount you use will be subtracted from your death benefit, which is what your family will receive after your death.
Living Benefit Rider
This is another term for the Accelerated Death Benefit that you can access before you pass away.
Additional Term Insurance Rider
This life insurance rider lets you add coverage for a specified amount of time, such as if you have extra insurance needs on a short-term basis. For example, if you have children to support, you might want more coverage while they’re young compared to when they’re adults, so you can add a rider until then. The rider costs extra to purchase, but it’s usually a reasonably priced way to get extra coverage for a limited amount of time.
Other Insured Rider
This rider lets you add level term insurance on another person for a specific period of time. The other person may be a spouse, business partner, or another loved one you’d like to protect.
Children’s Term Rider
This rider offers a death benefit in case a child passes away before a certain age, ensuring you have the money to cover funeral expenses. Once the term period for this life insurance rider expires, the plan can be converted into permanent insurance that has five times the coverage of the original amount, all without a medical exam.
Guaranteed Insurability Option Rider
This rider lets you buy additional insurance at specified ages at standard rates, no matter your health. This safeguards your insurability for your lifetime, even as your circumstances change.
Waiver of Premium/Monthly Cost of Insurance Rider
A life insurance rider of this kind provides protection in case you become disabled, as your premiums will be waived in the case of unexpected disability for six months or more. This way, even if you lose your job as a result of sudden disability and can’t pay your premiums anymore, you won’t lose your life insurance.
Reasons to Add a Rider to Your Life Insurance Policy
Life can change in unexpected ways, and life insurance riders are one way for insurance companies to acknowledge this and make sure you’re still protected. Riders give you flexibility to increase coverage for your family when necessary. Whether you want to add coverage for another person, increase your insurance benefits for a limited period of time, or make sure you have coverage in case the unexpected occurs, life insurance riders will benefit you.
Do Life Insurance Riders Require Medical Exams?
Some life insurance riders require you to undergo a medical exam before adding them. Check with your insurance company to find out if the rider you’re interested in requires this.
Are Life Insurance Riders Worth It?
Some life insurance riders are considered a cost-effective solution to protect your loved ones. For example, adding extra coverage for a short period of time through the Additional Term Insurance Rider is usually more cost-effective than getting a policy that has more coverage than you need for the entire term. In addition, buying extra coverage for unexpected setbacks in life—such as sudden disability—can be invaluable if the worst happens. To determine which life insurance riders provide the best value for you, it’s helpful to get a quote on both riders and full policies so you can compare costs.
Can You Add a Rider to an Existing Life Insurance Policy?
In most cases, you need to add riders when you first sign up for life insurance. But some life insurance riders are able to be added to an existing policy. For example, you can add the Children’s Term Rider after you have a new baby. In cases where you can add a rider to your policy, you may have to go through the underwriting process again.
Can You Remove Insurance Riders from Your Life Insurance Policy?
You can easily cancel life insurance riders by filling out a form. This is why it’s often best to get life insurance riders when you sign up for a new policy, as it’s easier to remove them than add them later.
Does a Term Life Policy Include Insurance For Riders?
You can get riders for your term life insurance policy, just as you can for your whole life or universal life insurance policy.
If you’re thinking about adding life insurance riders to your policy, schedule an appointment with a BetterLife agent today to talk about your options!