Life Insurance Riders That Are Best For You

When you purchase a Life Insurance Policy you have the option to add an array of additional benefits in the form of riders. These riders offer different living benefits, additional death benefits, and/or extended coverage for your family. Available riders differentiate with each individual company and policy you get.

"Riders can give policy holders additional

benefits and increase peace of mine

that if something goes wrong,

there's a Plan B."

- Shelley Fiore

Be sure to ask a trusted agent which riders are most beneficial to you and your specific situation. Riders are meant to expand the insurance you receive at a minimal price while maintaining your final expense coverage throughout. Each rider varies based on the company and the policy you've taken out. There are more than I've listed, but here are the top 5 life insurance riders most commonly used.

Accidental Death Benefit Rider

This rider only pays out if you die in an accident. It doesn't pay if you die of natural causes. There are different types of accidental death benefit riders.

Some companies offer double or triple indemnity, which means it will double or triple the amount of the face value on your whole life policy if you were to die in an accident. For example, if your policy is $50,000 and you have double indemnity, and die in an accident, your beneficiary will receive $100,000. Triple indemnity works the same way.

Other companies offer an option of choosing the face value of your accidental death benefit rider. You'll be quoted on an additional price for whatever amount you want added on top of your whole life policy. For example, if you have a $50,000 face value whole life policy and you want to add $150,000 as an accidental death benefit rider, if you were to die in an accident, then your beneficiary will receive $200,000. It works as a very cheap term coverage along side your whole life policy, but only in the case of death due to an accident.

There is also a dismemberment portion that is offered with some accidental death riders. It works as a living benefit and pays a set amount if you lose a body part. The specifics would be unique to the company and rider, but typically if you lose a limb it will pay a specific amount, if it's within a certain time-frame from an accident. 

Keep in mind, that with an accidental death benefit rider, if you we're to die from a natural cause, your beneficiary will only receive the face value of the whole life policy without including the accidental death benefit. 

Disability Riders

The first disability rider is the Waiver of Premium Rider. As the name suggests, this rider waives your premiums should you become disabled after you have been approved for your policy. This is not an optional rider if you were disabled before obtaining your whole life policy. Waiver of premium covers serious illness, injury, or disability for a certain amount of time, such as being out of work for 6 months.

There is also a Disability Income Rider. This rider supplements your income, should you become disabled, by paying out around 1% of the face value on a monthly basis. This can last until a certain age or continuously for life, dependent upon the insurance company. The disability rider is similar to the waiver of premium as it can also waive the premium depending upon the company and what they offer, while also paying monthly. The disability must be permanent and, again, it typically only pays out after a certain amount of time being disabled, usually 6 months.  

Living Benefit Riders

One rider that covers serious illness's and acts as a living benefit is the Accelerated Death Benefit Rider. This rider is activated when the policy owner has a terminal illness and is given less than a year to live (typically - it depends on the company). The insurance company allows the policy owner to take out a certain amount of money from their face value to use while they are alive. The money can be used to pay medical expenses, take that dream vacation, or for anything you want. The money that is used as a living benefit will be deducted from the face value of the policy and the beneficiary will receive what is left. 

This rider is great because it can be accessed while the owner of the policy is still alive, should they become terminally ill. Terminal illness's are commonly very expensive to treat, and having a large life insurance policy that allows you to take out half of the face value as an accelerated death benefit, could save your family from huge medical bills if you were to become diagnosed with an illness that is terminal.

A Critical Illness Rider is similar to the accelerated death benefit rider, as it too will offer living benefits, however the illness does not need to be terminal to receive the benefits. This rider provides access to a portion of your face value, which can be used on medical bills, traveling, or anything your heart so desires. Most critical illness's are included such as heart attack, stroke, cancer, coronary artery bypass, kidney failure, organ transplants, paralysis, etc. The money taken as a living benefit is deducted from the face value of the whole life policy and what is left will be paid to your beneficiary upon your death. The amount accelerated as a living benefits is dependent upon the company and the policy.

Term Conversion Rider

A term conversion rider allows you to switch a term policy over to a whole life policy without needing to prove insurability through underwriting. Proving insurability means you are in excellent health and can prove that you have not been diagnosed with any medical problems. Term policies usually last between 10 to 30 years. After the term policy ends, this rider makes it easy to ensure there is still funeral expense coverage. This rider is great to have because if anything in your health changes, you are still able to get permanent protection. Keep in mind that the premium rate you pay for whole life will be based upon your age when you decide to activate the rider. 

Child Rider

Some companies offer a rider on your policy that extends to cover your children and sometimes even grandchildren. You can always get your child an individual policy, which can be quite beneficial for them, or you can add a rider to your policy that covers them as well. A child rider will cover each of your children / grandchildren for one flat fee no matter how many children are added. Typically these riders stay in place until the child turns 18 or 21, but it varies depending on the company. Usually before the age of maturity is reached, you have the option of converting the policy to an individual policy for your child. 

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There are plenty more riders out there. Do some research and ask a trusted professional what your options are and what you qualify for. Your agent will be able to quote the price of your whole life, term, and riders. Combined, these can insure you will always be covered should anything go wrong.