What is a Rider?
An insurance rider is an add-on provision to a basic insurance policy that provides additional benefits to the policyholder at an additional cost. Standard policies usually leave little room for modification or customization beyond choosing deductibles and coverage amounts.
Here are some of the most Common Riders in Life Insurance:
Accelerated Death Benefit Rider
The accelerated death benefit rider pays a portion of the death benefit to you (the insured) if you become terminally ill with a short life expectancy. This rider has become a standard in the industry and is usually included automatically for free or offered at a nominal cost. The policy states how much of the death benefit would be available before death and it’s usually capped at $250,000 to $500,000.
Accidental Death Rider
Offers additional coverage equal to your policy’s death benfit amount in the event of accidental death within 90 days of an accident.
Reinstatement Without Evidence of Insurability Rider
Reinstates your policy without evidence of insurability within 90 days of lapse if you suffered a cognitive impairment.
Unemployment Waiver of Cost Rider
Waives the cost of insurance and cost of benefits or riders if you become disabled 9 certain maximums apply).
Waiver of Planned periodic Premium Rider:
Waves the planned periodic premium if you become disabled ( certain maximums apply).
Accelerated Benefit Rider
If you are permanently chronically ill, the rider pays one a monthly benefit equal to 3 percent of 75 percent of your death benefit.
Critical Illness Rider
A critical illness rider will provide a lump-sum benefit to help cover medical expenses and other costs if you were to be diagnosed with a critical health condition. This benefit is taken out of your death benefit and covers illnesses such as cancer, stroke, heart attack, coma and others.
Medical expenses can add up quickly with a critical illness and many people don’t have an emergency fund large enough to cover these expenses. This is why you may opt to add critical illness coverage.
Return of Premium Rider
With the return of premium rider, you pay higher premiums for the opportunity to get all of your money back if you live past the term on your life insurance policy.
Riders will add in the cost of purchasing Life Insurance through your premiums but maybe well worth it and save you thousands in the future.