How to Choose the Right Life Insurance Rider

Life Insurance

Choosing the right life insurance rider(s) is not always easy. Here is an overview to help you to decide which ones to include with your policy. Some of these riders are available only on permanent products such as a whole life or universal life. You should note that some are available on both permanent products and term insurance, depending on the insurance companies.

Acceleration of Death Benefit Rider: The acceleration of death benefit rider would be used if the insured were to become terminally ill. This rider would provide a payment to the owner or insured of all or a portion of the death benefit that would normally go to the beneficiary. The insured would submit information from his or her doctor to activate the coverage. Generally, the cost to activate the coverage is $150. The company doesn’t charge anything to add this rider to your policy. The only time there is a charge is if the rider needs to be used. This life insurance rider is also available to add after the policy is issued.

Accidental Death Benefit Rider: The accidental death benefit is rider would provide additional insurance to your beneficiaries if you were to die as the result of an accident. You are able to purchase up to the full amount of what your policy death benefit is. There is a charge for this coverage. This rider is also available to add after the policy is issued.

Disability Waiver of Premium: The disability waiver of premium rider gives the insured coverage if he or she were to become totally disabled on or before turning 60. The disability must last for at least six months for there to be coverage and if so, the insurance company will pay the premiums on the policy while the disability continues. If the insured were to become disabled after the age of 60 and prior to the policy anniversary of age 65, then the insurance company would only pay up to the age of 65. There is a charge for this rider also. If the rider is not activated, the premium will decrease at age 66 as this coverage would not be available if the person became disabled after the age of 65.

Children’s Term Insurance Rider: The children’s term insurance rider would give term coverage for each of the insured’s children, stepchildren or legally adopted children.The children must be under to age of 18 to be included on the policy. Any child that is born or becomes a stepchild or legally adopted after the policy is issued will be covered automatically. The additional children being added would not start until they were at least 14 days old. There would be half coverage for each added child at 15 days old and would be half coverage until the age of six months, after that time there would be full coverage. Insured’s that are the age of 18 to age 55 can add this rider with an additional cost. This rider is also available to add after the policy is issued.

Guaranteed Issue Rider: The guaranteed issue rider gives the insured the right to purchases additional policies without needing any medical underwriting or approval process from the company. This rider would only be available on a whole life product. There are set times and a specified amounts when this would be offered to the insured. If accepted, the company would issue an additional policy to the insured. There is a cost for this rider to be added to the policy.

About the author: Pam Fortier has been in the life insurance business for over 30 years. She also holds both a LUTCF designation and a CISR designation. Pam is adept at helping clients select the coverage they want at the price they can afford. You can contact Pam at 1-800-651-1953 or PFortier@Pivot.com.