Life insurance riders are customized terms that you can add to your life insurance policy. Most people use life insurance riders to customize their coverage to fit their financial needs later in life, such as putting aside funds to save for a child’s college education or a charity rider, which allows them to designate a portion of their life insurance payout to go to their favorite non-profit. While some riders (like a term conversion rider) are free, most life insurance riders will increase the cost of your policy.
Some add-ons are worth the additional cost, as they can make your policy work best for you to help you save money, protect against illnesses or medical costs later in life, and even fund retirement. Your licensed life insurance agent can best help you find the riders you need, but we’re covering popular options to help you get started.
If you are married, have children or other dependents, you should consider adding coverage that would best protect their financial situation if anything happened to you. A child insurance rider would cover funeral expenses if the unthinkable happened and your child were to pass away: this rider would step in and cover any end-of-life expenses, providing you with the space to grieve.
A spousal rider works similarly: If your spouse passes away you could receive the policy’s death benefit.
This rider is a good option for families with sole or numerous breadwinners, as it offers financial protection that could cover childcare, medical expenses or even a mortgage if one contributing breadwinner were to pass away.
A charity rider is a popular option for anyone with a term life insurance policy. When you purchase your policy and select your beneficiaries, the charity rider allows you to select a non-profit of your choice as an additional beneficiary on your policy. Your chosen organization will receive a payout from the life insurance company if you pass away and your policy beneficiary submits a claim.
The critical illness rider pays out an accelerated benefit by taking money from the death benefit of your policy to cover treatments for certain illnesses while you’re alive.
Covered conditions generally include heart attack, cancer, stroke or kidney failure. If you pass away, your beneficiary will receive the remainder of the money left within your policy that was not withdrawn to cover your treatments.
One of the most popular riders available, the return of premium rider, refunds the premiums you made throughout the life of your policy if you outlive your policy. This can benefit those with a term life insurance policy that lasts between 10-30 years, as they could receive a full refund if they don’t need to use the coverage. This rider is on the expensive side but that can often outweigh the potential payback received at the end of the policy term.
This rider allows you to change your coverage amount later in life. You will have to pay more for your updated policy, but this cost will be much less than going through the qualification process and purchasing a new life insurance policy.
Most people select this rider if they plan to get married or have children later in life, as it can adjust to their lifestyle later in life while allowing them to keep premium costs lower initially.
In the event you should need to stay in a nursing facility or receive home care, a long-term care rider on your life insurance policy would step in to cover monthly payments. You can also purchase this coverage on its own.
If you have a “risky” career or enjoy high adrenaline activities such as skydiving, your agent might recommend an AD&D rider for your policy. This rider would pay money from the death benefit of your policy if you were injured and lost a limb in an accident. If you die, the policy will pay out to your beneficiaries.
Since this rider has strict requirements about the cause of death of the policyholder, it’s less popular (and costlier) as an add-on.
While some life insurance riders provide great benefits, others can be a waste of money. Depending on your lifestyle and financial situation, your life insurance agent could best help you determine if you need any riders on your policy. If you have a high-risk job, you plan to get married/have children later in life or you have a complicated family medical history, the right rider could help you stay financially protected through life’s unexpected moments.
Schedule a free consultation with a licensed Quility agent or continue to our 10-minute online application for Quility Level Term, which includes a free charity rider! No matter your budget or needs, we can find a policy that will protect you through all of life’s unexpected moments.
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