Life insurance is one of those things that everyone knows they should have but only a precious few of us take the time to go about getting.
The immediate benefits of life insurance are obvious; it helps to protect our families and loved ones financially in case the unfortunate should happen, but what many people do not realize is that there are a number of riders that are either included in most insurance policies, or are cheap to add on that provide ample benefits. Below are four of the riders you’ll be most likely to see in a life insurance policy.
Accelerated Death Benefit
Please excuse the morbid terminology surrounding this rider, because it’s actually quite helpful to you if you should become terminally ill. Traditionally, the beneficiaries of term life insurance policies don’t directly benefit the person who the policy is attached to for obvious reasons. But with an accelerated death benefit, should you become terminally ill you can tap into a portion of the life insurance benefit. This helps to cover medical bills and other related expenses.
As the name implies, a term life insurance policy covers your death for a predetermined amount of payments and a fixed amount of time. The particulars with conversion riders change between providers (as they do with any rider) but the concept is the same. As long as you change your policy before a set time (usually either a set number of years or a certain age) you can convert your term life insurance to permanent life insurance. The kicker is that the rate is based off of when you originally signed up for your term life insurance, so if your health decreases after your original date you don’t have to renegotiate higher premiums. Conversion option riders and ADB riders are typically included in any term life insurance policy you’re likely to find.
Accidental Death Benefit
Life insurance policies will pay benefits through any cause of death, but an accidental death benefit rider will have your policy pay much more should you die from an accident or injury rather than natural causes or disease (for example). Many providers let you double the coverage in the case of an accident and this is a strong incentive for many life insurance holders since a death of this nature takes a heavier financial and emotional toll on the family.
It’s the last thing any parent wants to think about, but these cheap riders are great ways to add extended coverage to your family should the worst occur. While the child riders do not have the same coverage as your own policy, a small, yearly payment will usually add a few thousand dollars of coverage to your children. While nothing can replace the loss of a child, this type of coverage is good for covering funeral expenses.
These are only some of the most common riders found with term life insurance policies, and there are many more to choose from (and pay for) that makes it so you can fully customize any life insurance policy you might be interested in.
Liran Hirschkorn is the founder of ChooseTerm.com and is an expert in the insurance industry with 12 years of experience working with the best life insurance companies.
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