Although many people purchase basic life insurance, certain circumstances may warrant add-ons, or riders. Some riders are specific to term or permanent policies. Riders come with extra costs and specific coverage can vary from one insurance provider to another. Add-ons are subject to underwriting and you may not be eligible if you have certain health issues or a particular occupation.
Here are some of the more common riders used to customize insurance policies.
Term Conversion Rider
A term conversion rider lets you convert your term policy to a permanent whole life insurance policy without a physical exam. Often, this rider is already included in basic term insurance. If it’s not included, you can add this rider as you get older to avoid the coverage ending after a set number of years.
Return of Premium Rider
Specific to term life insurance, this add-on allows you to receive a refund of all the money you have paid into your policy when the term is over. Your premiums may be substantially higher with this rider, but its benefits can make it worthwhile in some situations. If you’re concerned you will outlive your term policy, a return of premium rider may be appropriate.
Acceleration of Death Benefit Rider
In the event you become terminally ill, this rider allows you to receive a portion of the death benefit. These funds can be used to pay your medical bills. Some basic life insurance policies include this provision, but if yours doesn’t, consider adding it.
Disability Waiver of Premium Rider
With this temporary disability rider, your premiums can be waived while you are disabled, usually for up to six months. The details can vary greatly between companies, so be sure to ask questions before purchasing.
Disability Income Rider
This rider is a permanent waiver of premiums and provision of supplementary income if you become permanently disabled. If you already have a long-term disability insurance policy, this rider may not be necessary; otherwise, consider adding it.
Accidental Death Benefit Rider
Also called double indemnity, the accidental death benefit rider doubles the face value of your policy’s death benefit if you die as a result of an accident. Coverage specifics can vary so if you decide to purchase this rider, verify that the list of covered accidents includes those you feel may be more likely to experience, such as car accidents.
There are many ways to customize your life insurance policy, and these are just a few of the more common ones. For more information about life insurance or to receive quotes, visit our Life Insurance page.