Life Insurance can be complicated in itself when trying to determine if Term, Universal or Whole Life is your best option, but what are Riders?
Simply put an insurance rider is like adding bells and whistles to a standard life insurance policy.
We will discuss a few of the most common riders in this article. Remember a Licensed Agent can save you time and money by helping navigate you through the process and the fine print.
Most Common Riders:
1. Accidental Death - If a death is ruled as an accident this rider will increase the amount paid to the beneficiary and in some cases double the death benefit. Companies will vary on what they consider is an accident and people age may age out of this rider. A number of Whole Life or Final Expense Plans have accidental riders that end at around age 70, with no decrease decrease in premium.
2. Child Term Rider- Essentially this is adding your child, grandchild or dependent minor to your life insurance policy. Most companies will allow the coverage to be converted to an individual policy once the child reaches adulthood, this could be 18 or 21, depending on the company.
3. Accelerated Death – This rider is designed for a person diagnosed with a terminal illness to access a portion of their policy benefits while they are still alive. Typically they will be able to access anywhere from 10% to 50% of the policy benefit. Most companies include this in standard policies at no additional cost. Using this rider will decrease the total death benefit. be sure to talk to your agent before utilizing this rider.
4. Waiver of Premium - This rider is designed to pay your premium payments if you become unemployed or disabled. Be sure to have your agent help you with this rider, as each company has different requirements that need to be met before utilizing this rider. This rider is best used for the primary provider of a household.
5. ROP or Return Of Premium – This rider allows you to pay on a term policy for a set of time- at the end of that time you will have two choices. 1. Have all the premiums you paid returned to you 2. Have a paid up policy that you no longer are required to make payments on. when looking at this policy rider, be sure to have an agent who can show you rates for multiple companies, ensuring you get the most bang for your buck.
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