Riders are addendums to an insurance policy that provide additional coverages or benefits. They can help customize coverage to meet individual needs. However, riders usually come at an extra cost and may not be necessary if the added features or benefits are not needed or expected to be used.
Types of Riders:
| Rider | Description |
|---|---|
| Guaranteed Insurability Rider | Allows the purchase of additional insurance coverage without further medical examination in the stated period. It’s most beneficial when there’s been a significant change in life circumstances, and health declines with age. |
| Accidental Death Rider | Pays out an additional amount of death benefit if the insured dies as a result of an accident. It’s ideal if the insured is the sole provider for their family. |
| Waiver of Premium Rider | Exempts policyholders from paying the premium due on the base policy until they are ready to work again if they become permanently disabled or lose their income as a result of injury or illness prior to a specified age. |
| Family Income Benefit Rider | Provides a steady flow of income to family members in the event of the insured’s death. It’s generally purchased by individuals who are the sole breadwinners of their families. |
| Accelerated Death Benefit Rider | Allows the use of the death benefits if the insured is diagnosed with a terminal illness that will considerably shorten their lifespan. |
| Child Rider | Provides a death benefit in case a child dies before a specified age. |
| Long-term Care Rider | Offers monthly payments in case the insured has to stay at a nursing home or receive home care. |
| Return of Premium Rider | Returns the paid premium amount at the end of the term. In the event of death, the beneficiaries will receive the paid premium amount. |
It is important to read the fine print before adding a rider to a life insurance policy and evaluate the benefits of riders with an insurance advisor to buy the one best suited to individual needs. Insurance coverage, premium rates, terms, and conditions of riders may differ from one insurer to another.
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Article Sources
- Dundas Life. What Is An Insurance Endorsement Or Rider? - Ldi
- Investopedia. Importance Of Riders In Insurance Policy
- Progressive. Rider: Definition, How Riders Work, Types, Cost, And ...
- Bankrate. Life Insurance Riders Explained
- Corporate Finance Institute. Significance Of Riders In A Life Insurance Policy