What Are Life Insurance Riders?

When you purchase life insurance, you need your policy to cover the costs of maintaining your current standard of living for your loved ones — but without breaking the bank. Yet since nobody knows what the future holds, you might experience life events that make it challenging for you to pay your premiums or that even require you to cash out some of your saved death benefit before the term of your policy is up.

As Investopedia advises, to keep your premium costs manageable, you can purchase riders — optional features that can be added to the basic policy as needed and provide benefits that aren’t included in the main coverage. Here are some of the most common riders:

  • Guaranteed insurability: This type of rider is only available for permanent policies. It provides you with the option to increase your death benefit — but without having to undergo any underwriting. It can be helpful in the event you want to start a family, which would mean you’d need more coverage once your children are born. Additionally, it can be helpful in the event you foresee your income rising substantially in the coming years, which would likely result in you and your family enjoying a higher standard of living. 
  • Accelerated death benefit: This rider allows you to access your death benefit early in the event you become terminally ill. For example, let’s say you are diagnosed with an illness that renders you incapacitated and unable to work — and that will shorten your lifespan considerably. An insurer usually releases between 25 and 40 percent of your death benefit, which you can use to support your dependents, as well as to pay for your own care. 
  • Accidental death and dismemberment: If you die due to a traffic accident, homicide, drowning, heavy equipment accident, fall or exposure to the elements, this type of rider offers an additional benefit on top of your regular death benefit. It also pays out in the event you lose one or more limbs. Note that the amount it will provide is capped, so it can’t serve as an investment method. 
  • Waiver of premium for disability: If you become disabled and can’t work anymore, it can be challenging to come up with the money to pay your premiums. This rider waives the premium of your base policy until you’re able to return to work. 

Determining which riders you need with your life insurance policy can be extremely challenging. That’s why it’s advisable to discuss your coverage needs with a knowledgeable, independent life insurance broker like the team at Liberty Financial Group. We have years of experience helping people like you get the coverage — and the riders — they need. For more information, please contact our offices today.