Choosing a Life Insurance Rider: 5 Great Options

A life insurance rider covers an additional risk that is not covered in your primary policy. Not every policy holder will need to purchase a rider. The rider coverage is needed by an individual with unique risks. For example, an individual with specific occupational hazards may need to buy a rider. There are riders for nearly every distinct need, so it is wise to explore your options.

Spouse Insurance Rider

This additional rider will insure your spouse. You can specify the coverage your spouse will receive, which may be equal to or lower than the coverage you receive as the primary policy holder. The greater the coverage, the more expensive the rider will become, increasing your premium.

Waiver of Premium Rider 

This rider is a great option for an individual with a very high premium. Under this option, you will be excused from paying your premium for a specific period of time if you become injured, ill or otherwise unable to work. This is also a great option for an individual who is the sole earner in the family. By excusing yourself from life insurance payments, you can protect yourself financially in case of emergency without losing your coverage.

Accelerated Death Benefit Rider

If you become ill due to a major illness, you may find you suddenly need coverage at a much more rapid rate than you anticipated. For example, individuals diagnosed with cancer can require funding to pay for therapy. Insurance funds would be better applied to this necessity, rather than kept in the fund in the case of the individual's death. With an accelerated death benefit rider, you can receive funding immediately if you are given a poor health prognosis. This may limit the funds available to your survivors should you die, however it can greatly ease the financial burden of a terminal illness and therefore be worth the expense.

Long-Term Care Rider 

As you age, you may find you are in need of long-term care. The harsh reality for many Americans today is that they actually need more money than they ever thought they would in retirement. People are living longer, but their health needs later in life have become increasingly more expensive. For this reason, you may consider purchasing a long term care rider. This rider will cover you if you need to enter a nursing home facility later in life, either temporarily or permanently. Again, it may limit the funding available to your survivors if your life policy pays out.

Guaranteed Insurability Rider 

This rider is a great option for any individual who is concerned with their insurability. For example, you may be healthy today, but you may also know you have a high risk of cancer later in life. If this were to occur, your life insurer could drop your policy upon physical examination. With a guaranteed insurability rider, your policy will never again require a physical examination. By paying more money to your premium today, you can ensure you are insured in the future.



How does an accelerated death benefit rider work?



You can add an accelerated death benefit rider to your life insurance policy in order to receive additional funding if you are given a poor prognosis. If you have a terminal illness that will shorten your lifespan, you can receive up to 40 percent of your death benefit immediately. This sum is subtracted from the amount your survivors may receive upon your death. However, the money is most often used to cover the high cost of treating a terminal illness, which can make sacrificing the future income worthwhile. Further, this rider is often very inexpensive or even offered at no additional cost.



How does an accidental death benefit rider work?



An accidental death benefit rider added to your insurance policy will increase the amount your survivors receive if your death occurs suddenly due to accident. The insurance company will define accident very explicitly, so it is worth looking into this definition before purchasing the rider. If you have the rider at the time of your accidental death, your survivors may receive twice the original value of the policy. This rider is often called a "double indemnity" rider as a result. This rider is most beneficial for an individual who is the sole earner or who works in an occupation with significant injury hazards.



How does a family income benefit work?



Family income benefit riders payout your life insurance like a monthly paycheck. If you die, your survivors will receive a steady income for a period of time you specify in your rider. This option is best for an individual who is the sole or primary earner in a family with a number of dependents. By paying out the policy over months and years, you can save your family from complications that can come with a lump settlement sum. Adding this rider can be relatively inexpensive, but you must make difficult decisions regarding the length of time that your family will receive the benefits.



How does a waiver of premium rider work?



A waiver of premium rider excuses you from paying your life insurance premium if you are temporarily unable to work. This is designed to allow you to continue coverage even if you have a temporary illness or injury preventing you from earning a paycheck. During this period of time, you will not be required to pay your premium, but you will still be covered by life insurance. This option is best for an individual who has a relatively high life insurance premium and would be at a significant disadvantage without an income. If you can continue to pay your premium from a savings account for up to three months without concern, then this rider may not be necessary.

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