Insurance Basics: Everything You Need to Know

Common Life Insurance Riders To Consider

Most life insurance policies' standard protections are fairly similar to one another, and sometimes policyholders want to add to the standard protections that are offered. Additional protection can be procured through riders, which enhance a policy with a narrowly defined additional coverage. Here are some common life insurance riders you may want to consider.

Accidental Death Rider

An accidental death rider pays an additional sum if the policyholder passes away as the result of an accident. This sum can be equal to the face value of the policy, which effectively doubles the amount the policy pays beneficiaries if the policyholder dies in an accident.

If you're the sole income earner for your family, an accidental death rider can ensure that your family is well taken care of should you pass away suddenly in an accident. Because accidents can result in unexpected deaths, this rider can help your family members cope with the abrupt and unanticipated tragedy.

Waiver of Premium Rider

A waiver of premium rider eliminates a life insurance policy's premiums if the policyholder becomes permanently disabled or otherwise loses the ability to earn income because of an injury. Should the policyholder be unable to work, the policy will continue to remain in effect even when premiums are no longer paid.

If you're using life insurance to replace your income if you pass away, this is an essential rider to consider. While disability insurance can be used to replace your income while you're disabled, it won't pay anything after you pass away. A waiver of premium rider ensures your life insurance policy will remain active even in the worst times and your beneficiaries will be paid if you die.

Long-Term Care Rider

As people live longer and the cost of long-term care increases, long-term care riders are becoming increasingly common. This type of rider will cover monthly payments if the policyholder needs to enter a long-term care facility later in life.

Long-term care insurance can also be purchased on its own, but sometimes it makes more sense to add the coverage through a life insurance rider. Compare a long-term care policy's premiums to the cost of a long-term care rider, and you might find that the latter is more affordable.

Importantly, this rider only extends long-term care coverage to the policyholder. Whereas some long-term care insurance policies will cover a couple, a rider on a life insurance policy will only apply to the life insurance policyholder. This may be a consideration if you're married.

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