Supplemental Benefits & Riders for Your Life Policy
There are many options from which to choose when purchasing a life insurance policy, so it is important to have an understanding of the variety so you can determine which ones will best fulfill your needs. Here is an explanation of the most commonly sought after riders, all of which can be added on to your basic term or whole life coverage.
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Disability Income: Most people accept this supplemental benefit because they rely on their income and need to make sure that they continue to receive a paycheck of sorts if they ever become permanently disabled. With this add-on to your policy, you will be eligible for a monthly income (a percentage of your death benefit) after an initial waiting period, should you become completely disabled and unable to work. It is especially important to carry this if you are the sole breadwinner in your family and if your salary is providing for the care of your dependents.
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Accidental Death Benefit: This provision gives the beneficiary up to three times the usual payout if the insured is killed in an accident. Typically, death must occur before age 65, and certain types of accidents are covered; sickness is not. While not necessary coverage for anyone, it can help to compensate when someone dies unexpectedly, leaving him or her no opportunity to make financial plans for his or her loved ones, to pay off debts, or otherwise get affairs in order.
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Cost of Living Rider: This rider allows the policy holder to buy increasing amounts of insurance each year to manage the increased financial needs that come with inflation. The cost of living index determines exactly how much, but adding this benefit to your life insurance policy is usually very affordable.
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Spouse or Children's Rider: Add-on this supplement to receive equal coverage for your partner, son, or daughter. They will also have the option to convert to an individual policy without a medical examination.
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Guaranteed Insurability: If you have a family history of health problems, you may want to consider this rider, which promises you the opportunity to buy even more coverage as you age, without a medical evaluation. The new rates would be based on the amount you add and on your age, not your health. Usually, a rider like this is set up to expire by age 40.
If you have any other special concerns, you should absolutely speak with your representative to determine whether or not there is a supplemental benefit that can be tied into your life policy. Most of the time, riders are available for both term and whole coverage. Some must be added when you first purchase coverage and others can be added with time or as needed. While a barebones policy can be fine, you may want extra coverage for additional protection. After all, life insurance is all about protecting your loved ones in the event of a tragic loss. You can never be too prepared.
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