Important Riders for Life Insurance Policies
Did you know that you can create a more comprehensive life insurance policy by adding various riders? Riders come at an added cost to the base policy, but can give you additional benefits that might come in handy during the life of your policy. Available riders will vary based on the insurance company, state availability and the life insurance product that you choose. The conditions that must be met to use certain riders might differ by company as well. Here is a list of some important riders that should be considered and a basic explanation of the benefit that each can provide.
Waiver of Premium Rider – In the event that you become disabled and are unable to work, this rider will pay your premium until you are no longer disabled or up to certain age such as 60 or 65. This rider can give you added peace of mind that you will still be covered if you are unable to work because of a disability.
Guaranteed Insurability Rider – Your life insurance need may increase over time if you buy a bigger home or have more children. This rider will allow you the option to buy more insurance at certain intervals set forth by the insurance company whether it is a time period like every five years, certain age levels or certain life events like having a child without proof of insurability. You will be able to use your original health rating but you will pay premiums based on your age when adding coverage.
Critical Illness Rider – This rider will accelerate the death benefit and pay you a lump sum if you suffer a critical illness such as a heart attack, stroke or cancer. You can use the funds for anything that you might need such as treatment or simply to pay bills.
Long Term Care Rider – This rider will also accelerate the death benefit for qualified long term care benefits. In order to qualify for benefits, you must be unable to perform 2 of the six activities of daily living, which are bathing, continence, dressing, eating, transferring and toileting. You will also qualify for benefits under this rider if you are considered cognitively impaired. This rider requires its own separate underwriting at the time the time the policy is purchased.
Chronic Illness Rider – This rider will accelerate the death benefit if you are diagnosed as chronically ill. Like the long term care rider, you will be considered chronically ill if you are unable to perform 2 of the six activities of daily living and you will also qualify for benefits under this rider if you are considered cognitively impaired. But it is important to note that this rider is a bit more restrictive than the long term care rider in that your chronic illness must be permanent in order to receive benefits in most cases and care might only be available in a nursing home.
Disability Income Rider – This rider allows you to accelerate the death benefit so you can receive monthly income in the event that you become disabled. The insurance company will outline its definition of disability in the policy. You can determine such factors as monthly benefit amount, how long benefits are received and the length of the elimination period before you purchase the policy, which will determine the price of the rider.
Terminal Illness Rider – This rider is usually attached to a base policy at no cost but it is worth mentioning. The limits for this rider might vary by company but the general idea is that if you develop a terminal illness and you are expected to live less than 12 months, the insurance company will give you access to a certain amount of your death benefit before you pass away.
Overloan Protection Rider – This rider could come in handy of you have a permanent policy and you intend on borrowing from the cash value in the future. The rider can keep your policy from lapsing, assuming certain conditions are met, if you borrow too much of your cash value.
Accidental Death Benefit – Provides some multiple of face value if the insured’s death is accidental. Be careful though, life insurance companies have very specific definitions of what they consider “accidental”. Make sure you understand the insurance company’s specific definition of “accidental Death” before you consider adding this rider.
This is not a complete list of all of the riders that are available from life insurance companies, but rather a list of some of the more useful riders out there that are available for term and permanent products. It is also important to note the descriptions of the riders listed above are very general and will vary among companies as will the actual rules for access to these riders. Not all riders are available in every state. It is important to have your agent explain each rider that you might be interested in adding to your policy and if adding the rider makes sense for your situation.
Are you thinking of buying a policy and adding a rider? We can help. We have access to over 40 insurance companies and will use all of our resources to get you the best coverage option available. Please feel free to give us a call at (888) 687-9444 or email us at info@archstoneagency.com if you have any questions.
About Us
Archstone Insurance Services, LLC is an independent agency that shops over 40 of the top life insurance carriers to provide huge savings on life insurance coverage for our clients. We are happy to answer any questions you might have about any of the insurance products we offer, your planning needs or your existing coverage. Feel free to call us directly at (888) 687-9444 or email us at info@archstoneagency.com. You can also visit our website at www.archstoneinsurance.com.
