When it comes to life insurance, you have more than a few options and the choices can get overwhelming. Even once you’ve chosen between whole life and term, and the amount of coverage you need, there are still extras known as Riders that you can add on. In this post, we’ll help demystify what a rider accomplishes and point out some of the top ones that are likely to benefit you and your loved ones the most.
What is an Insurance Rider?
An insurance rider is a way to modify standard insurance policies which typically do not have many options for customization other than picking coverage amounts and deductible payments. Riders most often provide extra coverage for factors like accidental death, disability and other specifics and will include an additional fee. Less often, riders will limit payment for certain accidents, disabilities and conditions.
Riders can provide benefits for both the policyholder and beneficiaries. While many riders may payout more to beneficiaries, some can also allow policyholders to use funds to help cover the costs of terminal illness and other health conditions. They also allow you to personalize a policy to meet your individual needs and give you a way to add coverage as your needs change which is cheaper than changing to a completely new policy.
Top Riders to Consider
Rider for Disability Income
Disability income riders will pay you if you should become disabled and cannot work to supplement your lost income. Most riders of this type will only payout if you are disabled by an accident, but some will also work with disability caused by illness.
Disability income riders are further customized by the length of time and how much they payout. Some will payout for the duration of your disability or the length of time you are unable to work, while some will only pay for a predetermined amount of time such as six months.
Guaranteed Insurability (GI) Rider
A GI Rider insures that you are able to purchase additional coverage if your health or circumstances should change, without having to get a medical exam or otherwise proving your ability to be insured. This can help those who become ill get coverage to cover medical costs and death benefits when they would be otherwise unable to do so.
Accelerated Death Benefit Rider
This rider will help any policyholder who becomes terminally ill and is given a short life expectancy – typically, one year or less. If a policyholder finds them self in this situation, an accelerated death benefit will allow them to use a portion of their benefits while they are still alive to cover medical expenses and to improve quality of life.
These riders have become very common and they are usually free or very affordable to add on to a policy. However, it should be noted that an additional fee may be charged if the rider is used.
Rider for Critical Illness
Similar to the accelerated death benefit, a critical illness rider pays out if you are given serious diagnoses such as heart attack, stroke, etc. This benefit will come in the form of a single lump sum that can be used as the policyholder chooses.
Accidental Death (Double Indemnity) Rider
With accidental death riders, your insurance policy will pay out more if you should die from an accident versus an illness, suicide or other cause. Some accidental death riders will also payout if you should suffer loss of one or more limbs or loss of your sight.
Cost of accidental death riders can be significant and those with high risk employment or hobbies will be charged higher rates. However, for people who do have certain high-risk careers, this rider can be extremely valuable.
Choosing the Right Insurance Riders for You
There are a multitude of riders and coverage options to consider when choosing your insurance. Getting the right riders for your needs can have a major impact on you and your loved ones in the event of your illness, injury or death.
For help choosing the best riders for you, contact the expert brokers at Arbor Creek Financial. Our professional representatives will discuss your needs, budget and circumstances to help you determine the optimal coverage levels for you and your loved ones. To learn more about your rider and policy options, contact Arbor Creek today.