Any life insurance policy worth its salt needs to be as flexible and accommodating as possible. No two policyholders are ever the same.
Everyone has a diverse list of reasons to opt for insurance and no policy can succeed in covering the needs of many.
Maybe you want coverage for a mortgage, loan or debt, or maybe you want coverage for your child’s education.
Whatever the reason, a life insurance rider is a service that could come in handy, especially if you want to make modifications to your policy. An insurance rider is an optional feature that can provide extra benefits which were not included in the basic plan.
While some riders are available at no extra charge, most of them require you to pay a surcharge.
Accelerated Death Benefit (or Living Benefit) Insurance Riders
Accelerated death benefits are options you can use for payout in case of an unexpected circumstance.
These riders must first fit a qualifying criterion to be available for use.
They pull money from your life insurance death benefit. Payout happens when you need financial support for things like living expenses.
There are several types of accelerated death benefit riders.
The most popular one is ADB, or Terminal illness accelerated death benefit insurance rider.
ADB is a rider that provides a financial payout in the event that you are diagnosed with a terminal illness. It is usually included in your life insurance policy at no extra charge.
One of the qualifying factors for ADB is having a very short amount of survival time left, usually 6 to 12 months.
Critical Illness Insurance Riders
Critical illness insurance riders are options you can avail in your lifetime if you fall victim to certain illnesses.
They usually cover a wide range of illnesses, most of which may result in high medical expenses and a shortening of your life expectancy. These can include heart attacks, cancer, stroke, kidney failure and ALS.
Critical illness insurance riders also include:
- Chronic Illness Insurance Rider
This starts paying out benefits at an increased pace if you can prove that you are unable to perform at least 2 of the 6 Activities for Daily Living. These Include eating, bathing, getting dressed, toileting, transferring, and continence.
- Long-term Care (LTC) Insurance Rider
This is the same as the chronic insurance rider, except it addresses a longer period of medical care expenses. It usually comes with a high additional premium but will continue to payout until you pass away.
- Waiver of Premium for Disability Insurance Rider
This is also known as the disability income rider and will forgive your life insurance policy’s monthly premium payments. This happens if you fall victim to a disability and can no longer provide for yourself.
Family Insurance Riders
These riders offer extra coverage for your family members. You have the option to pay extra to receive a payout in the event that a family member named in the rider passes away.
The 2 main types of family insurance riders are:
- Spousal Insurance Rider
If your significant other provides a benefit to your family, such as providing extra income, they need to be considered in your coverage.
Spousal insurance riders will pay out if your significant other passes away. This will help fill some of the financial void they leave behind.
- Child Insurance Riders
The primary reasons for adding child insurance riders to your policy is if you are aware of any illnesses your child may have.
It could be wise to insure your child now rather than when they are sicker and the premiums are higher.
Are Life Insurance Riders Worth it?
This depends on your own unique position and circumstances. While they are a great way of adding flexibility to your policy, they may not be essential to you but could be a tool for the survival of others.
It is important to weigh your requirements and choose accordingly. Some riders can end up being an invaluable addition to your policy; others may cost more than they are worth.
So, it is essential to talk to multiple insurance companies and do your due diligence before making a decision. Online services like Dundas Life can help answer any questions you may still have.
