The Benefits of Including Riders in Your Life Insurance Policy

In this age of customization and personalized deliverables, you should expect no less from your life insurance policy. Most policies are constructed with a basic framework in mind; you pay a premium (periodically or at one time) and should you pass away while the policy is still in effect, your beneficiaries can access the death benefit tax-free to pay off expenses such as funeral costs, and pending loan or mortgage repayments that will lapse without your income. The condition is, as long as you’re making payments regularly and on time, your life insurance policy will continue to cover you. Not everyone’s needs are cut out to be so simple. Sometimes the need for additional protection through regular life insurance is very tangible early on. This is why life insurance policies have riders.

A rider is a provision attached to life insurance that is purchased in addition to a basic policy.

Here are some important (and popular) riders that will help you customize and personalize your life insurance so it can cover more:

Waiver of Premium:

Waiver of Premium (WP) was designed to help if a disabling injury took away your ability to work and pay your premiums in order to keep the policy in force. If you add the WP rider to your policy, the insurance company pays for your premiums indefinitely until you are better and are able to work again. You would have to be disabled for a period of six months or longer to be able to use this rider. WP must be selected at the time of application.

a) Return of Premium:
Return of premium or ROP is a type of term life insurance that refunds the premiums you paid over the life of the term policy if you outlive the coverage. Term insurance provides no returns for the premiums you regularly paid into the policy until it expired. ROP is a solution to problem and a method of recovery for the investment you made in form of premiums.
b)Renewal Provision / Guaranteed Insurability:
The Renewable Provision allows for an extension of insurance coverage in the case of term life once it expires. With this rider, you won’t be asked to prove your insurability all over again. However, you must use this provision within a period defined by the company, because it expires at a certain age.
c) Child riders:
Dealing with the death of a child is harsh and unthinkable, but planning for it can be wise, especially since funeral costs aren’t exactly cheap. You pay miniscule amounts, as low as $5 per month, on your child riders.
d) Spouse riders:
This works the same way as a child rider. It covers final expenses on your husband or wife for an additional cost.
e) Accidental Death Benefit/ Double Indemnity:
This rider works on the premise that an accident, because if its unplanned nature and sudden disruption, causes more discomfort to the grieving family; not to mention the high medical bills. This rider increases the death benefit to double the original value, but be aware of the carrier’s stringent standards on what they consider an accident.
f) Accelerated Death Benefit or Critical Illness:
If you are diagnosed with an illness and need to pay large medical bills but cannot afford to do so while your policy is still in force (especially because you may not be able to work anymore), you can use this rider to access a portion of your death benefit to pay the bills. Today, most life insurance policies include this kind of rider, but make sure your policy includes this contingent.
g) Long Term Care:
This rider is usually available on whole life insurance. By paying for this rider, you can access your cash-value to pay for long term care associated with old age or a debilitating illness.
h)Withdrawal Provision:
This rider (on whole life insurance) allows you to withdrawal money from your life insurance policy up to the amount of the cash value you have accumulated. This will however cause ysssour death benefit to be reduced by the amount you withdraw.
i) Family Income Benefit Rider:
This life insurance rider pays out the death benefit in regular monthly payments to your beneficiaries. This translates into a reliable and predictable source of income for them. When purchasing this rider, you have to define the length of the term you would like to provide this income security.

Adding a life insurance rider means paying more in addition to your premium. Not every family needs all of these riders, so choose wisely. To make up for the additional coverage you need through the extra cost of purchasing these riders, look for affordable life insurance quotes on aggregator websites. Planning for numerous unpredictable events in your future can be easily manageable through your life insurance policy.