A term rider is an additional policy added to a permanent life insurance policy that provides temporary coverage for a limited period. The rider can be added to the permanent policy at the time of purchase or later, and it can be removed when it’s no longer needed. A term rider can increase the death benefit of a permanent life insurance policy, providing additional protection for a specific time period.
Benefits of a Term Rider
Adding a term rider to your permanent life insurance policy can be beneficial in several ways:
Benefit | Explanation |
---|---|
Cost-effective | A term rider can be cheaper than purchasing a standalone term policy now and a permanent policy later because life insurance rates increase as you age. |
Flexible | A term rider can provide flexibility to adjust your death benefit over time as your needs change. |
Temporary coverage | A term rider can provide temporary coverage for a limited period, such as paying off a mortgage or a child’s student loans. |
Considerations for a Term Rider
It’s important to keep in mind the following considerations when it comes to a term rider:
- A term rider will increase the premium of your permanent life insurance policy.
- A term rider cannot be added to a policy you already own, and not all policies allow you to remove the rider before its term is over.
- If you’re primarily concerned with cost, a standalone term policy may be a better option.
In summary, a term rider in life insurance can provide additional temporary coverage to a permanent policy, allowing for flexibility to adjust your death benefit over time. However, it’s important to weigh the cost and other considerations before adding this rider to your policy.
Burial Insurance
Article Sources
- Forbes. Understanding The Life Insurance Term Conversion Rider
- Investopedia. Term Life Insurance: What It Is, Different Types, Pros And ...
- Progressive. Rider: Definition, How Riders Work, Types, Cost, And ...
- Bankrate. What Are Riders In A Life Insurance Policy?
- USAA. Types Of Life Insurance Explained