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List of the 11 Best Life Insurance Riders

riders-for-life-insurance

Some life insurance companies offer a wide range of life insurance riders while others offer only a select few. At TermLife2Go, we work with the top rated companies offering the best life insurance protection. If you need a specific rider or would like to talk with a professional about your options, please give us a call today.

Top 11 Best Life Insurance Riders

  1. Conversion Rider
  2. Spouse Insurance Rider
  3. Long Term Care Rider
  4. Chronic Illness Rider
  5. Child Rider
  6. Accelerated Death Benefit Rider
  7. Paid Up Additions Rider
  8. Accidental Death Benefit Rider
  9. Return of Premium Rider
  10. Waiver of Premium Rider
  11. Disability Rider

What is a life insurance rider?

If you are shopping around for life insurance, you have probably heard the term life insurance rider or seen it on life insurance websites. But what is a life insurance rider?

When you purchase life insurance, you purchase a policy. However, that policy may need some customization for your particular needs and wants. Life insurance riders are additional options that help you increase your coverage and/or add additional benefits, such as living benefits. Not all people purchase riders, but it’s a nice option to have.


Conversion option:

This life insurance rider option is available for term life insurance. Close to all term policies come with a free conversion option. Basically, you can convert all or a portion of your term life insurance to a permanent policy (think Universal Life). There is no proof of insurability (i.e. no medical exam or health questions). Your policy is simply converted based on your current age and the rate class you originally qualified for. You must convert before the end of your term or by age 70, whichever comes first.

This option would be exercised when a person is diagnosed with some sort of disease or condition which would preclude them from getting life insurance or make getting new life insurance too expensive.

Price: free


Spouse Insurance Rider:

Rather than purchase a separate life insurance policy for your spouse, you can buy one single life insurance policy and add a spouse insurance rider. This is a life insurance rider that basically allows you to both be covered under a single life insurance policy by paying a bit more in the form of a life insurance rider.

Price: For a life insurance rider, it may be expensive, but it may be cheaper than buying two separate life insurance policies. You might also consider survivorship life insurance as an alternative.


Long-Term Care Riders:

There are many life insurance riders that pertain to people who may not die, but wind up needing long term care. Perhaps in the future you are in an accident or develop an illness that requires ongoing care—if you have life insurance with a long term care rider, then you’ll be protected.

Depending on the long term care rider plan you choose, LTC policies can pay for care in a nursing home, an assisted-living facility, or care at home. Benefit periods vary from two to six years but may also last your entire life.
The LTC benefits will normally begin if the insured is unable to perform two or more activities of daily living (ADLs) for a certain period of time. Benefits may also begin if the insured requires supervision due to a severe cognitive impairment.
Price: varies depending on carrier and plan.

Chronic Illness Rider:

A chronic illness life insurance rider, much like a LTC rider above, pays out a portion of the death benefit in a lump sum or monthly payments if the insured cannot perform 2 of 6 ADL’s (activities of daily living). LTC riders are typically superior in the benefits offered to a chronic illness rider.

Price: varies depending on carrier.


Child rider:

You can add your children to the policy with a life insurance child rider. Typical life insurance amounts range from $1,000-$25,000. The best part about a child rider is you pay the same price whether you have 1 child or 10. This is a really great option for someone with a large family, rather than buying individual child life insurance on each kid.

Price: The cost is roughly about fifty cents per $1,000 with the cost per unit dropping as the face amount increases.


Accelerated death benefit rider:

If you are diagnosed terminally ill then your life insurance policy will pay out up to 50% of the face amount depending on the specific carrier and the face amount of your policy. Typically you will need a note from your physician which states you have less than 1 year to live (2 years with some carriers). You can use that money to do whatever you need. Most people find it useful to pay medical bills, hospice, and any other expenses they may have.

Price: free. An accelerated death benefit rider is typically included in all fully underwritten life insurance policies but check with your agent or carrier to confirm.


Paid Up Additions rider (PUAR):

Also known as Paid up additional insurance rider or PUA, this whole life insurance rider allows the policy owner to purchase paid up life insurance, increasing the policy’s cash value and death benefit.


Accidental death benefit rider:

You can add additional coverage in the form of an accidental death policy. Since this only covers accidental death and does not cover natural causes (such as heart disease, stroke, or cancer), this life insurance rider is typically only purchased when the insured is maxed out on the amount of life insurance they can qualify for and he or she need some additional coverage.

Price: ranges depending on the carrier. Roughly $10 per $100,000 of coverage.


Return of premium rider:

This is a rider on a term life insurance policy. The ROP rider allows the owner of the policy to recoup all the premiums paid throughout the term of the policy (i.e. return of premium). Either the policy pays out or your premiums paid over the term are returned. Since your premium is returned at the end of the term it is more expensive than term life insurance, but with the added benefit of getting all your premiums back. Think of it as a forced savings account that pays a huge death benefit if you die prematurely.

Price: generally increases the premium of a term life insurance policy between 50-100%.


Waiver of premium rider:

This life insurance rider allows the premium due to be waived if the insured becomes disabled. The insurance company pays the premium on the insured’s behalf for the period of time that they are disabled. This is a great rider for a small business key person or for someone who is using life insurance to fund a buy-sell agreement.

Price: price depends on face amount and term length. Generally, it is an affordable rider, adding around 5% to the policy premium.


Disability rider:

If the insured becomes disabled, the life insurance company will pay a monthly lump sum to the insured. There is typically a 6 month waiting period before any money is paid out. This is an expensive rider and is generally not recommended except in cases of business owners, such as key person life insurance.

Price: very expensive. It can double the premium.


About TermLife2Go

By working directly with TermLife2Go you will have an assigned agent dedicated to your application.  This agent will be available to you throughout the entire application process; he or she will provide you with status updates as your application goes through underwriting and will also review your application at time of approval to ensure that you are still getting the best deal out there!

So what are you waiting for?  Just give us a call to see what we can do for you!

Thank you for reading our top life insurance riders article. Please leave any questions or comments below.

 

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