Introduction:
The life-saving boat in the storms of one's life are the life insurance policies. They protect the individual and their beneficiaries from the perils of life by financially compensating them in case of the insured's death. While a policy in and of itself is essential, there are a number of riders that one can add on to it to provide even more protection. These riders benefit you by supplementing your life insurance policy, and can be worth considering if you want the absolute protection for your loved ones.
Riders are those add-on features to a life insurance policy that aren't included in basic policies. However, life insurance companies offer the privilege to add them in the main policy to modify your plan as per your needs.
Riders are of different types and can be for different needs. The most popular riders are listed below with a brief description of what they do.
Accidental death benefit:
An accidental death benefit is a modification clause commonly known as a rider, which can be added to a life insurance policy. It provides double protection in cases where the policyholder's death is due to an accident. Lump-sum money is paid to the beneficiary in case of accidental death. It is a type of insurance contract clause that pays out an additional sum of money or regular annuity payments if the policyholder dies due to an accident.
For instance, Jack is playing the role of a single father having three young children. Being a young professional in his early 30s, Jack is worried about his post-death family crisis. So he buys a Texas life insurance policy with an accidental rider to get double death benefit in case of his accidental demise. So, now if Jack dies prematurely due to an accident, his beneficiaries will get the death benefit mentioned in the policy plus an additional sum assured that he opted for while buying the policy with the rider against the increased monthly premiums.
Accelerated death benefit:
This rider is specially designed for those policyholders who are suffering from a terminal illness and have a life expectancy of fewer than 12 months or, in the rare case more than a year or two. This rider gives you the benefit of accelerated death benefit which is the percentage of your life insurance policy that will be paid to you while you are alive if you are diagnosed with a terminal illness. The rider is also known as viatical settlement and living benefits.
Under such circumstances, the policyholder can receive part of their life insurance settlement while they are still alive to use as they see fit. The money can be used for anything from final expenses and medical bills to day-to-day living expenses.
Waiver of Premium:
Here in this rider, if an insured person becomes disabled and unable to work, the life insurance company will waive (stop charging) the premium payments. The rider is beneficial for those policyholders who become disabled and cannot afford to pay their premiums.
The rider can be included in both term and permanent life insurance policies. A notice from the Social Security Administration (SSA) confirming the disability and the physician's statement is required to submit a claim for the waiver of the premium rider. It'll cost 15% to 25% of a term life insurance policy and 0.5% to 1% of a permanent life insurance policy. Additional fees are charged to claim this rider.
Applicants can't get a waiver of premium rider if they're disabled at the time of applying for life insurance or are physically challenged.
Guaranteed Insurability:
This rider is beneficial for those policyholders who want to secure their insurability in the future, regardless of their health condition at that time. Upto the specific age interval, this rider can be added to the policy.
This rider allows the policyholder to purchase additional life insurance at specified future dates without having to provide evidence of insurability. The option to purchase additional life insurance is generally offered at each policy anniversary until a maximum age, typically between 45 and 55.
The rider is beneficial for those who are healthy when they purchase their life insurance policy but may have health issues in the future that would make them uninsurable. It is also beneficial for those who are looking to increase their life insurance coverage at specific points in their life, such as when they have a child or marriage.
Spouse and children riders:
These riders provide term life insurance coverage for your spouse and children. The death benefit is paid to the beneficiaries if the policyholder dies while the riders are in effect. The riders can be added to both term and permanent life insurance policies. It contains a conversion provision that allows the policyholder to convert the coverage to a permanent life insurance policy without evidence of insurability.
Term Rider:
The LIC term rider policy is an add-on benefit to the base life insurance policy. This rider can be availed by paying an additional premium. The rider sum assured is payable in case of the policyholder's unfortunate death during the policy term. Nothing is payable under this rider benefit on survival to the end of the policy term.
It is beneficial for those policyholders who want to secure their family's future in case of their untimely death. The rider sum assured can 5cover expenses such as mortgage payments, child's education, and other household expenses.
Read here for a complete guide to buy life insurance.
The Bottom Line:
These are the most common life insurance riders, and they can provide a lot of extra protection for your loved ones. If you're interested in getting the most out of your life insurance policy, be sure to consider adding these riders. The extended value addition can be a real lifesaver in times of need.
Hence, get a life insurance policy with riders for extra protection. This will give you peace of mind, but it will also financially secure your loved ones in unfortunate eventualities. Consult TX Insurance Quotes, the professional insurance provider catering to clients in Corpus Christi, Harlingen, Odessa, Victoria, and other major cities of Texas, for more details on riders and the premiums.
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