Most consumers today have a basic understanding on how a life insurance policy protects a person’s dependents from suffering a financial loss. There are several excellent options to consider when purchasing life insurance that you should be aware of also. Most every life insurance policy offered on the market today has riders that can be incorporated into the policy to enhance the terms of the policy and add more value.
You can consider these very beneficial riders before you apply for your new policy. Riders normally have an additional cost but can easily pay for themselves many times over. Let’s look at the most common riders you will see on most Term life insurance policies.
Life insurance riders are offered on Term life insurance as well as Universal life and Whole life insurance policies for an additional cost.
Waiver of Premium Rider:
The optional Waiver of Premium rider gives you the benefit of not needing to continue paying the premiums on your life insurance policy should you become completely disabled and cannot work. Generally most of the insurance carriers limit the age on the policy to age 65. If you are older than 65 and become totally disabled and are completely disabled for more than six months, your premiums will be waived.
This is a very good rider to have due to the fact you will have the peace of mind that you will not lose your life insurance because you became ill will a health condition or had an accident which would prevent you from earning an income. This particular rider is also one of the most common riders purchased.
Life insurance riders normally have to be requested at the time of the application and not added on at a later date.
Return of Premium Rider:
The Return of Premium rider is going to be one of the most expensive riders available. This is due to the fact that the life insurance company will return every penny of the premiums you paid them if you outlive the policy. This rider can be incorporated into Term life insurance policies which have a term period you can outlive unlike permanent plan designs such as Universal or Whole life insurance.
The premiums for a Return of Premium policy can be double what the premium would be for conventional term life insurance. If you are looking for the most affordable Term life insurance, a standard Term plan design would be the most cost effective way to go.
Your life insurance agent or broker can explain all the details of life insurance riders available to you before you apply.
Accidental Death Benefit Rider:
The Accidental Death Benefit Rider is also referred to as the famous Double Indemnity rider which I am sure most everyone has heard of. This rider increases the death benefit if the insured dies by means of an accident. Some of the carriers will pay out an addition percentage if the death was caused on common carriers such as a commercial airline, train or ship. This rider may also include an additional payment for dismemberment if you lost a limb or your eyesight.
Life insurance companies will take into consideration your occupation if it is hazardous when they determine your life insurance premiums. We work with over 40 highly rated life insurance companies and this premium is normally inexpensive especially for what the rider can do to increase the death benefit.
If you are looking for cheap life insurance, a basic Term life insurance policy will be the way to go.
Critical Illness Rider:
The Critical Illness Rider will direct the insurance company to pay you a lump sum payment if you’re diagnosed with one of the major illnesses named in the life insurance policy such as cancer, heart attack, stroke, kidney failure and a number of others. This is a newer rider that is available today and can really prove to be one of the most beneficial riders when a person has the misfortune of being diagnosed with a critical illness.
These types of benefits are also referred to as “Living Benefits” and have drastically increased the value of a life insurance policy to the extremes. This rider can be attached to low cost term life insurance to have the best of both worlds when considering price and benefits.
If you are shopping for affordable term life insurance, make sure you are at least aware of these very beneficial riders.
Term Conversion Rider:
The Term Conversion Rider allows you to convert your term insurance policy into a permanent type policy without having to take another medical exam. This rider is especially beneficial to younger people who may easily out live the maximum term period and want permanent life insurance for the rest of their lives. This rider is usually built in to a Term life insurance policy for no additional cost. This rider can vary from one insurer to another. Keep in mind that there will be an increase in premiums when a conversion is made going from Term to a permanent plan design.
Comparing Term life insurance quotes on a consumer quote engine will not display all these optional riders and should be explained by your agent.
These are just the most common life insurance riders offered at the time of application but the total list of riders exceeds what you have just read. You should be aware of additional riders and their benefits due to the fact they normally cannot be added on at a later date. If you are more concerned with finding the life insurance with the lowest rates, eliminating the use of riders will keep the premiums down to fit your budget when purchasing your new life insurance plan. Many consumers purchase life insurance with no knowledge that these rider even exist.
Hopefully this knowledge will make you a smarter life insurance buyer the next time you ever apply for a new life policy. Thank you for reading our blog post; Types of Life Insurance Riders to Consider. Feel free to use our consumer quote engine and remember to contact us with any questions you may have. There is no cost or obligation for our assistance, so give us a call today.