When it comes to making long-term financial plans for your family’s future, life insurance can be a very helpful tool. Its primary purpose is to ensure the financial security of those you care about after you are gone. You can also add further benefits to your life insurance policy by purchasing riders, which are essentially changes to it.
It is possible to opt in for benefits that are not normally included in conventional life insurance plans and it is also feasible to change your policy so that it better meets your needs with the use of riders. The following is a list of some of the most common riders that can be added to certain life insurance contracts.
Accidental Death Benefit
This rider ensures that the beneficiary receives an increased amount of benefit in the event that the insured person passes away as the result of an accident. Indemnity on both sides is another name for this. It is essential to be aware of the precise definition of an accidental death provided by the insurance provider. Accidental death payments will only be paid out in the event that the accident in question meets the definition of an accident.
Accelerated Death Benefit
This rider kicks in when a certain event occurs, such as the diagnosis of a terminal illness. It is possible for a portion of your death benefits to be paid out to you before you pass away, which can assist you in covering costs such as long-term care. Accelerated death benefits have the potential to lower the total amount of death benefits received.
Waiver of Premium
If you become incapacitated before a certain age and are unable to continue paying your premiums because of it, this rider will ensure that your life insurance policy is maintained even after you reach that age. The policy benefits can be preserved through the use of a rider known as a waiver of premium, which can pay up to a predetermined sum.
Guaranteed Insurability Rider
You can get additional coverage at certain time intervals up to a certain age (usually 40) as long as you have this rider, and you won’t need to provide documentation that you are insurable. Only your age, not your health or any other characteristics, will be considered when determining whether or not you are eligible for additional coverage under this plan. Guaranteed insurability riders can also include “triggers” for life events, such as getting married or having a kid, that allow the policyholder to obtain more coverage at certain points in time.
Spouse and Children Riders
These riders offer coverage for a spouse or children under the terms of a term life insurance policy. They come with a clause known as a conversion provision, which enables a spouse or children to change to a permanent life insurance policy without having to provide proof that they are insurable.
A term rider can be connected to an existing policy in order to change the amount of coverage for a certain term. This is useful in the event that you require additional coverage for a limited time period, such as throughout your working career, for example.
Automatic Premium Loan Provision Rider
If you are unable to make the payment for your premium by the time the grace period ends, this rider will automatically take out a loan against the cash value of your policy and use the money from the loan to pay for your premium. Anyone who is prone to forgetting to make a payment may find this to be of great assistance.
Return of Premium Rider
You are able to receive a refund of any premiums paid into a term life insurance policy if you purchase this rider. Because this sum is considered a refund, there will be no taxes withheld from it. The noticeable increase in the cost of life insurance that results from the addition of a return of a premium rider is a drawback of this policy feature.
You are able to personalize your life insurance policy to meet your requirements by using riders. If you are in the market for life insurance, our knowledgeable agents are here to assist you.