Life insurance riders are the most common way to make small additions to your policy without completely changing gears and looking at different life insurance quotes. A rider is simply a condition that has been added to the policy above and beyond the guaranteed death benefit. You typically pay a small fee to have the rider attached, and you may need to pay only a monthly basis to maintain it.
However, this fee is typically small in comparison to the possible bonus that each add-on can provide. The key to getting the most out of your policy is knowing what additions you want to have and managing them as well as possible. To accomplish this, you'll need to learn about the additions first, but you'll also want to work with a qualified life insurance professional to obtain the additions and ensure that they're right for you. Understanding what's available is a good start, but professional help is still a must.
#1: The Waiver Of Premium Rider
With this addition, you and your family remain protected and will not see a lapse in coverage should you become disabled. In essence, you pay a little bit more every month, and should you ever become unable to work for medical reasons, you are not required to pay the premium until you can return to your job. This can keep your coverage from lapsing should you be unable to pay. However, be sure that you determine what your chosen company considers a disability. The exact definition will vary from company to company.
#2: The Accelerated Death Benefit Rider
If you are ever diagnosed with a terminal illness, this rider will ensure that you receive some payout to help offset the cost of your care.
Typically, you will see somewhere between 25% and 40% of your total benefit being paid out, which can be used directly to help you and your family cope with the diagnosis and any care required. Although this can be very beneficial, be aware that your family may receive less upon your death should you choose this option. Companies will almost invariably subtract the amount paid out ahead of time from the ultimate benefits, but often will subtract interest as well, reducing the amount even further.
#3: Guaranteed Insurability
After you go through the initial screening process and receive your final life insurance quotes, many companies offer this option to their insured individuals. This rider guarantees that you can purchase additional coverage for a certain period of time, and during that time you won't have to undergo any additional medical testing. This is typically available to younger individuals, and can save hassles for a young family that finds itself wanting more coverage but doesn't have the time for more screenings. It may have a restriction that makes it expire with age, but it may also have a renewal provision allowing you to renew the policy without additional examination or obtaining new life insurance quotes.
#4: Family Income Benefit
This rider modifies your plan to provide an income to your family for a set number of years after your death. This income can be invaluable to your family, and purchasing it through an add-on makes it easy to control exactly what will be paid and for how long. If you have a family or are considering starting one within the next few years, ensure that your life insurance quotes include this as a possible option.
#5: Long Term Care
If you ever need to be placed in a nursing home or receive in-home care, this type of policy addition will provide a monthly sum to help pay for the assistance. Although it is possible to obtain separate coverage for this type of situation, it's often easier to simply roll it in with your life insurance quotes.
#6: No Lapse Riders
Unlike most other types of policy add-on, no lapse only applies to universal policy options. Because of the way universal coverage works, it can lapse mid-policy more easily than most other types. Individuals who own universal plans must be constantly vigilant, and may still find that they have difficult ensuring activity. To combat this problem, many companies will offer a system where you can maintain a certain premium level on your plan and receive guaranteed coverage provided you meet that level. Although this means less freedom of payment, it prevents lapses.
#7: Accidental Death Benefit
If death is determined to be accidental, an accidental death benefit can be paid at a higher rate than the initially agreed-upon life insurance benefit. This type of add-on is typically inexpensive and can be quite valuable to families.
Analyzing Life Insurance Quotes And Additional Benefits
Even if you can already pick out certain add-ons that you'd like to have for your policy, you should still seek the help of a qualified life insurance advisor. You'll need his or her guidance as you seek life insurance quotes, and as you determine exactly which riders will be applicable to your chosen style of insurance. Understanding these options for yourself is necessary and valuable, but you'll still need a professional's help.
SEEK INDEPENDENT ADVICE. All information expressed in this article is intended to be general information only. You should not rely upon this general information to make legal, tax, investment, estate, or financial planning decisions. No portion of this article is intended to nor does it provide legal, tax, investment, estate or financial planning advice. For this type of advice, you must consult an independent advisor.