What riders should I consider for my life insurance policy?
Last updated: September 2023
Purchasing life insurance is an important step toward securing your family's financial future. It can help provide for your loved ones when you're gone and pay for your final expenses. You can take your policy a step further by adding supplemental benefits using amendments known as riders.
What are insurance riders?
An insurance rider, also known as an insurance endorsement, is an additional provision or amendment added to your life insurance policy. Riders can help modify your life insurance to better suit your needs and allow you to opt into extra benefits not typically included in basic policies. Riders can be added or removed from an insurance policy at any time during the policy period, subject to the terms and conditions of the policy.
Type of life insurance riders
If you are interested in adding riders to your life insurance policy, consider the following popular riders, available on some life insurance policies:
- Waiver of premium:
This rider stipulates that your policy will be kept in place should you become totally disabled prior to a specified age (usually 60 or 65) and unable to continue paying your premiums, according to the New York Department of Financial Services. The waiver of premium rider can pay up to a certain dollar amount, allowing the policy's benefits, including cash values and/or dividends, to be maintained. Total disability is defined by the terms of the rider.
- Accidental death benefit:
This rider, also known as "double indemnity," secures an extra payment amount for the policy's beneficiary should the insured die in an accident. Pay close attention to your insurer's definition of "accidental" death, however. Only accidents that meet the definition can be covered by this benefit.
- Accelerated death benefit:
This type of rider can pay a portion of your benefits prior to death and is triggered by certain events, such as a terminal illness says the Missouri Department of Insurance. This can help you cover expenses such as long-term care, but be aware that it may reduce death benefits.
- Guaranteed insurability rider:
According to the New York Department of Financial Services, this rider enables you to purchase additional coverage at specified intervals of time, up to a certain age (usually 40) without providing evidence of your insurability. That means you have the opportunity to secure extra coverage based solely on your age - and regardless of your health or other factors typically considered by insurers. These riders may also include specific life event triggers - such as marriages or the birth of a child - which allow policy holders to buy additional coverage.
- Term rider:
Need extra coverage for a limited period of time? Term riders can be attached to existing policies to adjust the level of coverage for a specified period of time, according to the New York Department of Financial Services. Term riders may be useful as a means to acquire additional protection during your working career.
- Spouse & children's riders:
These riders will provide term (not permanent) coverage on the life of your spouse or children. A conversion provision in the rider allows the spouse or children to convert to a permanent policy without demonstrating proof of insurability, says the New York Department of Financial Services.
- Automatic premium loan provision rider:
Oops! Did you forget to pay your premium this month? This rider will automatically pay your premium by taking a loan from the cash value of your policy, should you fail to make your payment by the end of the monthly grace period. The New York Department of Financial Services suggests this rider for those who feel they may inadvertently miss payments. This rider can be cancelled at any time by the policy holder.
These popular riders provide a good starting point if you're considering amendments to your life insurance policy. . Keep in mind that some riders must be added when a policy is issued, and others can be added anytime. An insurance provider can provide more detail and help determine which riders might work best for you.