Riders are available on many life insurance policies to provide additional coverage. Most riders are only available at the time the base policy is purchased. Adding a rider later can result in a medical exam or underwriting.
Understanding the types of riders will help you choose which is best for your situation.
Waiver Premium Rider
Life insurance has the primary function of protecting your family if you die or become disabled. A policy’s continued coverage depends on regular payments of the predetermined amount. The waiver of premiums rider# protects the investment you made in your policy by guaranteeing that premium payments will be paid if you become disabled as long as the insurance company meets all conditions.
This rider covers you when you cannot work because of a serious illness or disability. The rider can require you to meet certain criteria or wait a specific period before starting to work. In some cases, the waiver rider# will require a doctor to certify you cannot perform your usual occupation and that no other job matches your qualifications.
This rider can be added to whole life insurance or other permanent policies with cash value. This rider also prevents these policies from lapsing when the loan balances are greater than the policy’s cash value. If you want to add the rider, talk to your Wealth Strategist.
Rider for Critical Illness
The critical illness rider provides an additional layer of protection from severe illnesses. These riders will help you pay for your medical care if you are diagnosed with a life-threatening illness. It is not the same as life insurance, which only covers you after death. This can leave your loved ones with no money.
You’ll typically receive the benefit as a tax-free lump sum. You can use the amount to pay for medical treatment, replace debts, or cover lost wages. Benefits may include transportation, lodging and other costs.
Some companies offer a critical illness add-on with their term policies. Still, others charge an extra fee. By add a critical illness rider to your term life policy, you can better manage your expenses while leaving more money for your beneficiaries.
It is important to weigh the costs and benefits of critical illness riders. It could lower your death benefit. Therefore, it is important to consider your options carefully. Before making a decision, speak with a licensed insurance agent to ensure you fully understand all options’ costs and benefits. Remember that your death benefit can only be withdrawn once triggered by an event.
Terminal Illness Rider
This rider allows your family to receive a portion of your death benefit before you die if you are a diagnos with a terminal disease. This rider, also known as a living benefit or accelerated death benefit, can ease financial burdens on your family and let them spend more time with you.
This is not the same as a critical illness rider, which gives your family access to a portion of your death benefit if you are a diagnos with a covered condition (for instance, an open chest CABG or first heart attack; cancer of a specified severity; end-stage kidney failure, ALS, etc.). This coverage is only available if you are certified by a licensed healthcare practitioner.
A terminal illness rider does not require you to have a terminal diagnosis or less than 12 months left to live. This is why this rider costs less than a long-term care rider or chronic illness. Reviewing the policy terms and conditions will help you determine whether this rider is included in your policy. Some policies don’t include this rider, while others list it in a separate section.
Accidental Death Rider
Accidents can happen to anyone, but those who work in dangerous conditions or are accident-prone will find an accidental death benefit a valuable addition to their life insurance policy. This rider can increase the payout for policy beneficiaries if an accident qualifies. It is available on either whole or term life policies. It usually increases premiums. This rider is not recommended if you do not regularly participate in high-risk activities or if your existing death benefit will cover your family’s expenses in case of an accident.
This rider does not cover any deaths the policyholder is responsible for, like suicide. Some policies also exclude deaths resulting from dangerous hobbies or sports. Before purchasing this rider, it’s best to consult a financial advisor to fully understand the policy’s limitations and determine if it is worth paying extra.
Families who lose a breadwinner face not only grief but also financial hardship. This rider ensures that your family will receive more cash to help pay for emergency medical bills and other expenses. It is especially important for those in high-risk professions or participating in hazardous sports/hobbies. This rider is usually a small portion of the face value of a whole or term life insurance policy.
