What is a life insurance policy rider and how does it work?
You can add a policy rider to your new or existing life insurance policy. Riders can add or restrict coverage to your life insurance policy for your spouse or children, or add accidental death coverage.
These insurance policy riders can extend your life insurance coverage to suit the specific needs of you and your family.
Guide to Life Insurance Policy Riders
The Basics of Life Insurance Policy Riders
If you need additional coverage, you may be able to add coverage to an existing life insurance policy. Riders can add more coverage or restrict the coverage provided by a life insurance policy.
It’s important to understand that adding a rider to your policy may increase the premium by quite a bit. This depends on the coverage you are adding to the policy.
However, reducing coverage you no longer need may save you some money on your policy.
Common Types of Life Insurance Policy Riders
The most common type of life insurance riders added to existing policies include: accidental death rider, waiver of premium rider, guaranteed insurability rider, family income benefit rider. In most cases it may be the wise choice to consider adding one or all of these riders to your life insurance policy. That depends on your personal situation and life insurance needs.
Review our definitions of the following riders to see which ones may be helpful to meet your life insurance needs.
Renewal Provision Rider
The Renewal Provision rider is also known as the Guaranteed Insurability Rider. When this rider is added to your policy it guarantees that when the policy expires at the end of the term, you will be able to renew the policy. One point to understand is that this rider usually requires that you renew the policy within a certain number of days. Also, this rider may expire, no longer be available after you reach a certain age.
Spouse and Child Life Insurance Rider
This rider lets you purchase additional coverage for your spouse and/or children. There is an additional premium charged for this extra coverage.
Accidental Death Rider
The Accidental Death Rider is also known as Double Indemnity Rider. If you add this rider to your policy, your death benefit will be double, if you die as a result of an accident.
This rider may state a certain age, after which this coverage is no longer available. Basically, the coverage is only available up until a certain age. That’s because older people may die from accidents at a higher rate than younger individuals.
Make sure to review the insurer’s definition of "accident" in the life insurance policy. There may be certain restrictions that apply to what is actually considered an accidental death.
Waiver of Premium Rider
The Waiver of Premium Rider protects you from having life insurance policy canceled if you are unable to pay the premium. The coverage is only available based on certain conditions or reasons for which you are unable to pay the premiums.
Many life insurance policies only allow this coverage to take affect for people over age 65. Generally, if you become disabled and are disabled for more than six months, your premiums will be paid.
Also, the premiums you paid during the six months you were disabled may be reimbursed, depending on the insurer. When you are no longer disabled, you must make the premiums payments to continue the coverage.
It’s important to be sure you understand what qualifies as disabled under the terms of the policy, and how long your insurer will allow you to receive coverage while not making the premium payments.
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