Accelerated Benefit Rider and Your Life Insurance Policy
In my opinion, the most import rider to have attached to your life insurance policy is the Accelerated Benefit Rider (also known as a Terminal Illness, Critical Illness or Living Benefits Rider). The rider, which is available on most term and permanent insurance policies, allows you to access a portion of your insurance amount if you become critically ill – typically with a life expectancy of 12 months or less. There is no up-front cost or charge for the rider, but should you exercise the rider, there’s a one-time administrative charge which can range anywhere from $100 to $250 (it can vary by insurance company).
This life insurance rider is a great benefit to have which can help you pay for medical expenses at a time when needed. However, the use of the money doesn’t need to be just for medical expenses as during this time there may be other financial strains as well.
There are limits within the rider as to the amount that you can access, and the accelerated benefits will reduce the ultimate amount of death benefit available. When applying for your life insurance policy – be sure to ask about this important rider. You should receive a disclosure statement with your application which explains the features, benefits and costs associated with the rider. Some insurance companies will automatically add the rider to an insurance policy, but not all do, so be sure your insurance agent knows you want the rider attached.
The Accelerated Benefits Rider is not the same as Long Term Care or Chronic Illness Riders. For one, there’s no underwriting for the rider like there is for Long Term Care or Chronic Illness riders. Also, if you already have a life insurance policy but don’t have the rider – check with your insurance company to see if the rider can be added – and if it’s possible, there may be a charge to add the rider.
About the author: Melanie Tretheway has been in the life insurance business for over 30 years. She is a mother of two who loves baking, reading, gardening, and taking care of her family. Melanie takes great pride in making sure you are informed, especially when it comes to choosing the right life insurance policy for your family. You can contact Melanie at 1-800-651-1953 or MTretheway@Pivot.com.