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Life insurance has many benefits, most important is the financial protection your policy can provide your loved ones when you pass away. However, your policy can also be a useful financial tool while you’re alive.
Life insurance riders are custom add-ons that you can purchase with your policy for added benefits. Adding a rider to your life insurance policy 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.
The return of premium rider is one of the most popular life insurance riders available. This rider provides a full refund of your premium payments if you reach the end of your term without using your policy. The money you receive is tax-free, but keep in mind that the return won’t include any interest you paid over the years.
The return of premium rider would increase the monthly premium you pay, but many people opt for this rider to gain peace of mind and the opportunity to get their money back at the end of the policy term.
Choosing this rider will provide financial protection through the life of your policy, and knowing you’ll receive a refund if you don’t need to use your policy is an added benefit.
The disability income rider provides a regular payout if you become disabled and cannot work. This rider can vary on whether it’s paid for a certain period or for the entire duration of the disability.
Some disability riders can cover work accidents while others are more comprehensive, with payouts for covered illnesses and accidents. If you don’t have an emergency fund, or your loved ones would face difficulties if you were injured and unable to work, this rider can help you cover living expenses.
The accelerated death benefit rider is a common add-on for many life insurance policies. With this rider, you will collect a portion of the death benefit of your policy if you face a critical diagnosis with a short life expectancy.
Your policy terms will specify how much of the death benefit you can access, and the funds can be used for anything you need, such as medical expenses, mortgage payments and more.
Another option is the critical illness rider, which would pay a lump sum benefit if you were diagnosed with a condition covered in the policy terms. Covered critical illnesses usually 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 use these funds to pay for medical expenses or cover exploratory treatments that might not be covered by your health insurance.
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