Life insurance is one of the most important investments that you’ll ever make for your loved ones. It’s vital that your family has the insurance protection that they deserve. When you’re shopping for coverage, it can be confusing with all of the options and additional riders that you can add-on to your plan, but not having adequate coverage could leave you and your family with massive debts and other expenses.
Due in large part to the need for creative protection solutions, a number of specialized life insurance policy riders have been designed to apply coverage where additional financial protection may be needed by a policy holder. Life insurance policy riders can provide policy holders with additional benefits, as well as increase peace of mind that if something happens, there will still be an adequate amount of coverage. If you’re looking for low cost life insurance, we can help.
This article is going to explore the most popular options for riders and which ones that you should consider adding to your plan. If you have any additional questions about these riders, please contact one of our experienced agents and they would be happy to answer those questions.
With the disability income rider attached to a life insurance policy, the policy holder can collect a regular income from the insurance company if they become disabled and cannot work. The policy will specify the amount of the income and whether it is paid for a certain amount of time or for the total length of the individual’s disability.
It is important to note that some disability income riders will pay out only if the policy holder becomes disabled as a result of an accident, while others will pay for an insured’s disability due to either an accident or an illness.
Term Conversion Rider
Term life insurance provides coverage for a certain period of time such as 15 or 20 years. Permanent life insurance, such as whole life or universal life, will provide coverage throughout one’s entire life (provided that the premiums are paid).
By obtaining a term conversion rider, the policy holder of a term life policy will be able to convert the term policy into permanent coverage without the need to undergo a medical exam to prove his or her insurability.
This type of coverage option can be especially attractive for those who are just starting out in their careers or families and who need life insurance coverage but don’t have enough funds to secure all of their coverage with a permanent life insurance plan. In most cases, there will be a deadline for when the policy holder must convert their term policy over to a permanent plan.
Accelerated Death Benefit Rider
The accelerated death benefit rider lets the insured collect a portion of the policy’s death benefit if he or she becomes terminally ill and has a short life expectancy, such as one year or less.
The insurance policy will typically spell out exactly how much of the death benefit will be available before death. The proceeds that are received can be used for anything that the insured sees fit, such as medical bills or living expenses.
Oftentimes the accelerated death benefit is automatically included on certain types of life insurance policies for free or for just a small amount of additional premium payment. In addition, there may be a fee charged to the insured for exercising this option.
Return of Premium Rider
If the insured lives to the end of a policy’s “term,” then he or she will receive all of their money back if they have the return of premium rider. This rider usually requires an additional amount of premium to be paid in for the privilege of obtaining funds back, should the insured live through to the end of the policy’s time period.
Child Protection Rider
While nobody wants to think about losing a child, the child protection rider can provide financial help to those who find themselves in this difficult situation. Even though the death of a child will not typically result in an income loss, the tragedy would still have certain financial consequences – which could essentially pose additional financial hardship on the family.
The child protection rider provides term life insurance benefits that can be used for final expenses in the event that a child passes away. With these riders, basic information about the child’s health is typically required for underwriting purposes.
Critical Illness Rider
With the critical illness rider, the insurer will pay the insured a lump sum of cash if they are diagnosed with one of the critical illnesses that are specified in the insurance policy. Typically, such illnesses will include heart attack, cancer, stroke, and kidney failure.
Rather than reimbursing the insured for his or her medical expenses the way that a health insurance policy does, the critical illness rider provides funds to use for any purpose that the insured sees fit during their course of treatment.
Waiver of Premium
The waiver of premium rider option can free the insured from having to make premium payments if he or she becomes ill or disabled prior to a certain age and are unable to afford the premium payments on the policy.
With this option on a life insurance policy, the policy dividends can continue to be paid and the cash value can continue to grow, just as if regular policy premiums had been paid. Prior to the waiver of premium starting, there is oftentimes a waiting period of six months of disability. In addition, prior to the waiver of premium paying the insured’s premiums, the insured must provide evidence to the insurance company that he or she is in fact disabled.
What Riders Do You Need?
Each person is different, and every family has different insurance needs based on their situations. There is no “one size fits all” plan that will work for everyone. It’s important that you look at all of the options based on your needs. There are several different questions that you should ask yourself when you’re shopping for coverage.
If you’re the main income earners in your family, then you may want to consider adding disability and critical illness coverage to your life insurance plan. These riders are an excellent additional to anyone that carries the financial weight in a home. If you’re were to find yourself disabled through an accident, your plan will provide the money that you and your family will need to get through the difficult time and find ways to replace that stream of income. In most cases, adding the coverage isn’t going to raise your premiums too much.
Another question that you’ll need to ask yourself is about losing one of your children. It’s a difficult subject to consider, but it’s something that you should consider when adding protection. If something awful were to happen, you would be responsible for thousands and thousands of dollars of final expenses. Adding a child protection rider is a great way to offset those expenses if you were to ever run into them. Losing a loved one is never easy, but having additional financial burdens is going to make the situation a thousand times worse. With most insurance companies, you can add this coverage for a couple of extra dollars every month. If you have a sizable savings set aside, then you can skip this rider and save money every month.
Working With An Independent Insurance Broker
When you’re shopping around for coverage and consider all of the possible riders, it’s important that you get the best coverage at an affordable rate. The best way to ensure that you’re getting the best plan is to work with an independent insurance agent. Unlike a traditional insurance agent, independent brokers can bring all of the best plans directly to you.
There are thousands and thousands of different insurance companies on the market, and each of them has different types of plans and riders, which means that you could spend weeks looking to find the best plan to meet your needs, or you can let one of our agents do all of that hard work for you. We can discuss your needs and life insurance preferences and then bring all of the plans that meet those requirements. Not only can we save you time, but we can also save you money on your plan as well.
Every insurance company is going to offer you different rates based on their underwriting and pricing algorithms, which means that you could get drastically differing rates depending on the company that you get the quote from. The best idea is to get dozens of quotes before you decide which one is going to work best for you. Our agents can do all of that in a matter of minutes.
Don’t wait any longer to get the life insurance policy and riders that you and your family will need. We know nobody wants to think about something tragic happening to them, but not planning for the worst could be detrimental to your loved ones. Contact one of our agents today and we can get the process started.