What Do All These Life Insurance Riders Mean?
Nearly all carriers offer life insurance Riders that can be added to their policies. Riders add additional benefit features to the base contract – though they also come with an additional cost. Depending on your situation these may or may not be needed. Below are some of the more common riders offered with term life insurance:
Waiver of Premium – This type of rider excuses the life insurance policy holder from having to pay premiums should they become very ill or disabled. This can give invaluable piece of mind during what is typically a very stressful time.
Accidental Death – For an extra cost, you can add this rider that will payout an additional sum (on- top of the original death benefit) should the insured pass away as a result of an accident. The additional amount can vary carrier to carrier but typically it is twice the original death benefit.
Child Rider – Parents or guardians applying for life insurance can add on this additional feature to cover their children. Usually, the child being added needs to be aged 17 or less, and typically, this will cover them until age 25. In some instances this rider can be converted to a permanent policy – thus locking in the child’s ability to purchase life insurance coverage as an adult.
Accelerated Death Benefit – This rider does exactly what it sounds like – it allows the death benefit to be paid out prior to the insured death should the insured be deemed terminally ill.
These life insurance riders can prove to be very helpful. Though the additional cost of these riders may make them seem cost prohibitive. You really need to gauge your own situation to evaluate how beneficial they would be to you. Do you travel frequently? Then the Accidental Death rider might be a good choice for you. Do you think you have a high likelihood of becoming disabled – and if you do, would paying your life insurance premium be an issue? If so, take a look at the Waiver of Premium rider.
The Child Rider is a topic most people shy away from for obvious reasons. It can provide great future benefits to your younger loved ones by allowing them to lock in coverage before they are an adult (and run into health issues that would disqualify them from life insurance coverage in the future). And should the worst ever happen, you’ll know you have the means to not only provide for final expenses, but to also properly grieve. Frequently, parents are forced to return to work before they have had enough time to properly grieve. The Child Rider can provide the means parents will likely need to remain out of work longer.
About the author: Seth Gowdy is the Sales Manager for Pivot Insurance and holds multiple insurance and securities licenses. He has been part of the financial services industry for nearly 20 years. In his free time he enjoys being outdoors fishing, hiking, and geocaching with his wife and two children. Seth most enjoys helping clients with Pivot’s anonymous life insurance quote process and needs calculators. You can reach Seth at 1-800-651-1953 or SGowdy@pivot.com.