Want to make plans for your family after you’re gone? Looking for ways to protect them while you’re still here? Life insurance is extremely helpful to the family you leave behind and can also be beneficial while you're living.
When life throws you an unexpected curve ball that could have devastating repercussions on your family, these term life insurance riders can help ease your collective pain.
The guys from InsureChance, put together a great synopsis on what life insurance riders are available:
Waiver of Premium Rider
Whether you work in a high-risk industry where injury or illness could render you unable to continue working and earning a wage for your family or you have an auto accident that brings about the same end, if you have a waiver of premium rider, it waives future premiums while continuing coverage.
This type of rider is most useful if you are the primary “bring home the bacon” wage earner in your family. If not, you may want to consider it for your spouse, particularly if he or she has a high premium at risk of lapsing due to an inability to pay the premium.
Before you buy: Learn how the individual insurer defines “total disability” as this varies greatly from one insurer to the next and can have a substantial impact as to how valuable the policy is in your situation.
Accelerated Death Benefit Rider
Sure, this is not something you want to focus on, but imagine that you suddenly become critically ill with a terminal illness and require expensive long-term care in a hospital or nursing home. The cost of care can be crippling in ordinary circumstances – even with medical and/or long-term care insurance coverage. The accelerated death benefit rider allows you to use a portion of your life insurance coverage to pay for expenses related to your illness.
This term life insurance rider may also be referred to as a critical illness rider with some insurers. The assistance in paying medical bills is a huge gift you can give your family however – one that will be greatly appreciated.
Before you buy: Read the small print before you sign on the dotted line and understand that most insurance companies will deduct the amount you receive from the benefits your family receives upon your death. Some will charge interest or some other fees on the amount paid early. Get all the facts and compare riders carefully.
Disability Income Rider
Are you concerned about your family’s ability to make ends meet if you are no longer able to support them? You’ve carefully planned how to care for them if you were to die, but what if you become disabled instead? Obviously, you’ll want to provide additional income to your family in the event that you’re no longer able to do so yourself. That’s where the disability income rider comes into the picture.
The disability income rider replaces your monthly income according to the terms set out in the policy. What this means for your family is that they’ll continue to receive the benefit of your income for the duration of your disability or until the terms of the policy ends.
Before you buy: Know the terms of the policy before you buy. There are always differences from one policy to the next and some may be more valuable to your family’s needs than others. That’s one of the reasons it’s always wise to work with an experienced, independent insurance agent.
Return of Premium Rider
This is one rider you should definitely discuss with your agent. The long and short of it is that it guarantees you that if you outlive the term of your policy, the premiums you’ve paid will be returned to you. You do pay a higher price for this privilege and you’re not paid interest on the premiums either, but many people really don’t mind.
The big question. Would it be wiser to invest in a more basic term policy and invest the difference instead?
The answer is actually quite complex – especially considering that the money returned to you is not taxed while the money you invest elsewhere will be taxed as income, which can be quite high depending on the state in which you live and various other determining factors.
Before you buy: Some policies do not require a rider for this. It’s automatically included when purchasing the policy. Other insurance companies offer the benefit as a rider policy you must purchase in order to receive.
Child Protection Rider
A sudden, unexpected, or accidental death of a child is more pain than any parent can bear. Worrying about finances is the last thing a parent wants to think about as they bereave the loss of their child. This rider can be used to pay for medical expenses or funeral expenses should this unthinkable event occur. The cost of the child protection rider is the same whether you have one child or 10.
Before you buy: Ask your independent insurance agent what your conversion permanent insurance options are after the child reaches maturity.
Your life insurance policy can have the most favorable combination of features when you add on riders that fit your needs and situation like a glove. Keep in mind that all our agents have access to all the major insurance providers so we can look around, compare prices, and help you piece together a life insurance policy with riders that maximizes your coverage while minimizing your costs.