Life Insurance Riders: What You Need to Know

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In this Article

You probably already know that life insurance provides financial protection and peace of mind for your future. Securing a life insurance policy is a great way to ensure your loved ones are prepared for anything life brings – but did you know that your life insurance policy can provide additional benefits while you’re alive? Often called living benefits riders, these add-ons can help you safeguard your income in the event of illness or disability, cover long-term care costs, or provide a cash-back refund if your policy goes unused.

Critical illness rider

A critical illness rider is one of the most popular types of add-ons. This rider would pay out benefits if you were diagnosed with a condition covered in the policy terms. The illnesses usually covered include cancer, stroke, kidney failure, heart attack, or other significant health events.

If you experience a covered critical illness or condition, your insurance company would provide a lump sum of money from the death benefit in your policy (this is the money usually given to your beneficiary when you pass away). You can then use these funds to pay for medical expenses or cover treatments that might not be covered by your health insurance.

Long-term care rider

This rider provides a payout if you become unable to perform two or more of the six basic daily activities  cited by Senior Living as mobility, personal hygiene, bathing, toileting, dressing and self-feeding. This financial support can help your loved ones cover expenses related to your care.

Waiver of premium rider

If you aren’t able to work due to an injury, disability, or illness, this rider allows you to skip premium payments on your insurance policy while keeping it in force. As long as you paid premiums on time in the past and your condition is diagnosed by a medical professional, this rider would kick in to give you some financial relief (for a pre-determined amount of time).  

Return of premium rider

The return of premium rider works as a cash-back option on your policy. If you choose a term life insurance policy and don’t need to use the coverage by the time your term expires, you could get a full refund of the premiums paid during the life of the policy. The money you receive is not taxable, but keep in mind that the return won’t include any interest you paid towards coverage over the years. This rider would increase the monthly premium you pay, but many people opt for this rider to gain peace of mind, knowing they’ll receive a refund if they don’t need to access their policy.

Get extra financial protection with life insurance riders

Living benefit riders can increase your monthly premium, but they are a good way to get a little extra financial protection for you and your loved ones. If you want to learn more about adding life insurance riders to your policy, check out our life insurance guide.

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Calie Brummer
Head of Digital Communications
Calie Brummer is a staff writer and Head of Digital Communications at Quility Insurance with a focus on financial well-being and life insurance solutions.