Learn How Term Insurance Riders
How Does a Term Insurance Rider Work?
If you are wondering how riders for term insurance plans work you’re probably considering the purchase of a term life insurance policy.
A term rider is coverage that is added to a term insurance policy when you buy a new policy, or you may add the coverage to an existing policy you already own.
Term Insurance Rider Explained:
It’s an endorsement added to a life insurance policy that provides additional term coverage for the specified amount. If the insured dies during the term of coverage, the designated beneficiaries can receive the death benefit proceeds.
Benefits of Term Riders
Term insurance is a form of life insurance that offers a death benefit to the family of the insured person in the event if the insured’s death.
So many people today think life insurance coverage will cost too much, but not with term insurance.
If you take the time to actually learn about term life and compare pricing you will find it offers affordable coverage for any budget.
And, term insurance riders can add additional coverage for your family at a very low cost.
A term life insurance rider is an amendment to a life insurance policy that adds supplemental coverage.
For instance, a waiver of premium rider will allow you to continue your term life coverage for a limited time if you are unable to pay the premium.
Riders Available for Term Insurance:
Types of Term Riders
Accelerated Death Benefit
In the event that the insured is diagnosed as terminally ill, if they have an accelerated death benefit rider on their policy, they will be allowed to take an advanced payment of a portion of their life insurance policy’s death benefit to pay for medical expenses or long term care.
An accelerated death benefit rider is usually included on most term life insurance policies at no additional cost. Accelerated benefits are also known as Living Benefits.
Accidental Death Benefit
Also known as double indemnity, an accidental death rider is added to a life insurance policy to provide additional death benefits if the insured person dies as a result of an accident.
For instance, if you have a $100,000 life insurance benefit and add the accidental death rider – if the insured dies from an accident, the total death benefit paid out would be $200,000 which is double the original coverage provided by the policy.
This rider pays out a death benefit upon the death of the children of the insured person.
Critical Illness Rider
A rider added to a life insurance policy to protect the insured against financial loss in the event of a terminal illness. It makes living benefits payable to the insured for medical expenses prior to death.
Illnesses covered and the premiums may vary by insurer; however, most insurers will cover cancer, coronary artery bypass, heart attack, kidney/renal failure, major organ transplant and paralytic stroke.
This rider provides level term insurance on the insured’s spouse. It can be converted to its own whole life policy at certain times and within certain age limits. This rider will terminate when the base policy ends or the spouse reaches a certain age.
Waiver of Premium Rider
The waiver of premium may be included in the term policy you purchase. It states that in the event you become disabled while you own your life insurance policy – as long as you are disabled for a minimum of 6 months – the life insurance company will waive your premiums for as long as your disability continues.
It does not matter how long you are disabled – you will not be required to pay the premiums. Upon recovery from your disability you pay your premiums again. You will owe no debt to your insurance company. The cost to add the waiver of premium rider to your life insurance policy is minimal.
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