Life insurance policies are designed to provide financial protection for your loved ones in case of your untimely death. But did you know that you can customize your policy with add-ons called riders? These riders offer extra benefits that can help personalize your policy to better suit your needs. However, they can also increase the cost of your premiums. So, the question remains- is it worth getting life insurance riders? Let’s take a closer look.
Common Life Insurance Riders
There are many kinds of life insurance riders, and their availability can vary depending on the insurance company and the type of policy. Here are some of the most common:
| Rider | Description |
|---|---|
| Accelerated Death Benefit | Allows you to take an advance on your death benefit if you’re diagnosed as terminally ill. |
| Waiver of Premium | Allows you to stop paying premiums if you become disabled. |
| Long-term Care | Allows you to access money from your death benefit to pay for long-term care. |
| Conversion | Allows you to convert a term life insurance policy to a permanent policy. |
| Child | Provides a small benefit to cover burial expenses for a child. |
| Disability Income | Offers a monthly payout if you become disabled. |
| Surrender Charge | Adjusts the charges to offer higher surrender amounts if you need to surrender your policy within the first few years. |
| Estate Protection | Helps offset estate taxes that may be due. |
| Additional Insured | Allows you to increase your death benefit without going through a full application process again. |
| No-Lapse Guarantee | Prevents the policy from lapsing during the rider period as long as certain premium requirements are met. |
| Return of Premium | Refunds the premiums paid if you outlive the term of your policy. |
| Spouse | Adds a limited amount of insurance to your policy that will cover your spouse. |
As you can see, life insurance riders can offer a wide range of benefits. However, each rider comes with a cost. Some riders, like accelerated death benefits, may cost little to nothing, while others, like return of premium, will cost much more.
Factors to Consider
When deciding whether to add riders to your life insurance policy, here are a few factors to consider:
- The cost of the rider versus the potential benefit if you use it.
- The financial risk if you don’t have the rider.
- Your unique circumstances, such as your health or financial situation.
If you have unique circumstances, it’s worth getting a professional opinion from a financial advisor or life insurance agent. They can help you determine if any riders are worthwhile for you.
Conclusion
In conclusion, life insurance riders can offer valuable benefits, but they come at a cost. Before adding any riders to your policy, it’s important to weigh the cost versus the potential benefit. Make sure to read your policy carefully and understand the definition and limitations of each rider. And remember, if you do decide to add a rider, your premiums will increase accordingly.
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Article Sources
- Thrivent Financial. Life Insurance Riders: Common Types Explained - Progressive
- Insurance Business Magazine. Life Insurance Riders: What You Need To Know
- NASDAQ. Life Insurance Riders Explained
- Amplify Life. 8 Life Insurance Riders Worth Considering
- Business Insider. Four Life Insurance Riders To Consider - And Two To Avoid