Making life insurance work for you is a process; you first have to find the type of policy that will best meet needs the best, and then you need to consider any gaps in that coverage. A traditional life insurance policy may not fill all your particular requirements and leave you vulnerable to loss. A life insurance rider may be just what you need to give you peace of mind that all your gaps are fully covered.
To find the additional life insurance coverage you want with the perfect rider to cover you, speak with an independent agent in the Trusted Choice® network. Find an agent today to get quotes on the most affordable life insurance riders and find the perfect coverage for all of your life insurance needs.
- In 2007, there were 1,459,900 home health care patients
- The mean length of service was 315 days
- In the same year there were 1,045,100 discharged hospice care patients; most were discharged deceased
Due to our aging population, it is estimated that by the year 2050, an estimated 27 million people will need some type of long term care.
What Are Life Insurance Riders?
Life insurance riders are simply forms of additional or supplemental life insurance coverage with a variety of functions. You can purchase the rider as an add-on to your main policy. These riders provide you with extra coverage for specific situations.
One of the benefits of a life insurance rider is that you can add coverage for special challenges and sudden, expensive health events, like nursing care.
Do I Need a Life Insurance Rider?
Determining whether you need a life insurance rider will depend on your financial situation, your age, the state of your health, the needs of your dependents, and your desire to have coverage for a specific situation. Your need for a life insurance rider may also depend on how much life insurance protection exists in the policy you have, and what gaps in coverage remain.
What Are the Best Life Insurance Riders?
There are a variety of riders that provide additional coverage for different sorts of situations. The most commonly purchased riders include, but are not limited to, the following:
- Accidental death benefit rider: This rider provides additional life insurance coverage if you die as a result of an accident. It generally pays twice the amount of your original life insurance coverage and is sometimes also known as “double indemnity.” Some of these riders also allow for an additional payment for dismemberment, or loss of a limb.
- Long-term care rider: This rider is a specific amount of coverage for a specified period of time. Variations exist which may allow you or your beneficiaries to collect all or a portion of the long-term benefits should the premiums not be used. Others allow the purchaser to receive their unused premiums back, or return the premiums if the insured cancels coverage.
- Waiver of premium rider: This rider will ensure that your life insurance premiums will continue to be paid if you become disabled and can no longer work, making it a hardship to continue the insurance premium payments.
- Return of premium rider: The rider may be purchased separately or included in the primary life insurance policy. It applies to term life insurance policies and guarantees that all the money spent on the premiums will be refunded (without interest) at the expiration of the term or policy.
- Disability income rider: If you become disabled, this rider will pay you a monthly income outlined in the policy.
- Guaranteed insurability rider: This rider guarantees that you can renew a term policy when you reach the end of the term, regardless of the state of your health. Read the provisions carefully as there are specific conditions that vary from company to company.
- Accelerated death benefit/critical illness rider: This rider allows you collect either a portion or all of your life insurance coverage if you are diagnosed with a terminal illness and require long term care in a facility or nursing home. The terms of this rider allow you to pay for medical expenses or any other form of additional expenses you incur as a result of your terminal illness.
- Term conversion rider: If you have a term life insurance policy, this rider allows you to convert your term policy into a permanent insurance policy such as whole life or universal life insurance without having to take a medical exam. It is useful for younger people who can’t afford a permanent policy but want a policy that covers them for life. Convertibility features have specific requirements, so make sure you understand the policy stipulations.
- Family income benefit rider: This rider allows your family/beneficiary to receive your death benefits in specified monthly installments or for a particular duration, rather than receiving death benefits as a lump-sum payment.
- Child protection rider: This option provides nominal coverage should your child accidentally die, and can be used to pay for funeral or medical expenses depending on how much coverage you buy. The issuance of these policies may require a health profile on the child.
- Cost of living rider: This rider allows you to automatically add more life insurance coverage to your existing policy based on the Consumer Price Index, which counters the inflation over the lifespan of your existing policy.
- Funeral and burial insurance rider: Additional smaller policies can be purchased which will pre-pay or provide a specific death benefit amount to pay for the cost of your funeral.
Using Life Insurance Riders to Pay Off Debt
Life insurance riders can be used in a variety of ways to pay off your existing debts. If you are diagnosed with a terminal illness, for example, an accelerated death benefit rider allows you to collect some or all of your death benefits right away. You can then use those benefits to cover some or all your current existing debts.
A family income rider will allow your beneficiaries to manage debt payments on a monthly budget.
A disability income rider will provide a source of income should you become disabled, and it will allow you to continue to pay off your existing personal loans and credit cards.
An accidental death benefit rider can double the amount of your death benefits should you die accidentally. This extra income amount can also be used to pay off your mortgage and other existing debts.
Using Life Insurance Riders to Pay for College
College and university tuition is expensive, and it can take many years to pay off a student loan. Several of the life insurance riders described above can provide you or your beneficiaries with extra coverage so that the student loan can still be paid if you die unexpectedly, or if you become critically ill or disabled and can no longer earn an income.
Using Life Insurance to Pay for a Funeral
There are specific policies or riders designed to cover the cost of a funeral or pay for burial expenses. These riders or policies can be bought separately from your primary life insurance policy. They come in a variety of formats, such as preneed funeral insurance, final expense insurance and burial insurance. These policies will pre-pay directly to the funeral home or pay a lump-sum specified in the policy to your beneficiary.
Everyone has unique concerns and needs when it comes to life insurance. A primary policy such as a term or permanent policy may not meet all your needs. You can customize and strengthen your life insurance protection by purchasing riders to create the ideal insurance package that addresses all of your primary concerns.
Life insurance riders vary considerably from insurer to insurer. To find the most suitable rider for your insurance requirements, contact an independent agent in the Trusted Choice network. Your agent can help you compare policy rider options that can be tailor-made for your unique situation.
Contact an agent today to find the perfect life insurance riders that will protect you from the unexpected.