What Riders Should I Consider for My Life Insurance Policy?

Published: July 2014

Purchasing life insurance is an important step toward securing your family's financial future. It can help provide for your loved ones when you're gone and pay for your final expenses. You can take your policy a step further by adding supplemental benefits using amendments known as riders.

A father and son sitting in a tree

Riders can help modify your life insurance to better suit your needs and allow you to opt into extra benefits not typically included in basic policies, says FinancialWeb.com. Consider the following popular riders, available on most life insurance policies:

  • Waiver of Premium: This rider stipulates that your policy will be kept in place should you become totally disabled prior to a specified age (usually 60 or 65) and unable to continue paying your premiums, according to the New York Department of Financial Services. The policy's benefits, including cash values and/or dividends, are maintained. Total disability is defined by the terms of the rider.
  • Disability Income: If you do become totally disabled, this rider will provide income equal to a percentage of your death benefit after an initial waiting period, the New York Department of Financial Services says.
  • Accidental Death Benefit: This rider secures an extra payment amount for the policy's beneficiary should the insured die in an accident, according to InsuranceInDepth.com. Since the extra amount is often twice the policy's death benefit, this rider is also known as "double indemnity." Pay close attention to your insurer's definition of "accidental" death, however. Only accidents that meet the definition can be covered by this benefit.
  • Accelerated Death Benefit: If you're diagnosed with a terminal illness, accelerated death riders can pay a portion of your benefits prior to death, says the Missouri Department of Insurance. This can help you cover expenses such as long-term care, but be aware that it may reduce death benefits.
  • Guaranteed Insurability Rider: According to the New York Department of Financial Services, this rider enables you to purchase additional coverage at specified intervals of time, up to a certain age (usually 40) without providing evidence of your insurability. That means you have the opportunity to secure extra coverage based solely on your age - and regardless of your health or other factors typically considered by insurers. These riders may also include specific life event triggers - such as marriages or the birth of a child - which allow policy holders to buy additional coverage.
  • Term Rider: Need extra coverage for a limited period of time? Term riders can be attached to existing policies to adjust the level of coverage for a specified period of time, according to the New York Department of Financial Services. Term riders may be useful as a means to acquire additional protection during your working career.
  • Spouse & Children's Riders: These riders will provide term (not permanent) coverage on the life of your spouse or children. At the end of the rider's term (or in the event of the policy holder's death), a conversion provision allows the spouse or children to convert to a permanent policy without demonstrating proof of insurability, says the New York Department of Financial Services.
  • Automatic Premium Loan Provision Rider: Oops! Did you forget to pay your premium this month? This rider will automatically pay your premium by taking a loan from the cash value of your policy, should you fail to make your payment by the end of the monthly grace period. The New York Department of Financial Services suggests this policy for those who feel they may inadvertently miss payments. This rider can be cancelled at any time by the policy holder.
These popular riders provide a good starting point if you're considering amendments to your life insurance policy, but it isn't an exhaustive list. Consult with a financial professional to better understand the options available to you.

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