Which Life Insurance Riders Should You Add to Your Policy?

​Thinking about purchasing life insurance? That could be a smart decision, especially if you have a spouse, children or other dependents who rely on you for financial support. If you pass away, those loved ones may find themselves struggling with a lack of income, debt and other financial challenges.
Of course, there are other reasons for purchasing life insurance. Perhaps you recently took out a loan to buy a home, business or other significant asset. You may need life insurance to pay off the balance if you pass away. Or maybe you’re in a business partnership and need life insurance to fund a buy-sell agreement. Perhaps you want to use life insurance to leave a tax-free legacy to your loved ones.
No matter your motivation, it’s important that you take time to find the policy that’s right for your needs and objectives. You also may want to examine each policy’s available riders. These are options that provide additional benefits, sometimes at extra cost. In the right circumstances, these riders can address a critical need. Below are a few of the most common life insurance riders and how they may benefit you:

Waiver of Premium
 
This is a common rider that many insurers include in the base coverage. It waives your premium if you become disabled and are physically unable to work. It helps you maintain your life insurance protection even if you can’t pay the premium.
Don’t think disability is likely? You may want to think again. The Council for Disability Awareness estimates that 25 percent of today’s adults will suffer a long-term disability that prevents them from working at some point in their career.1 While disability may not be probable, it is certainly possible.

Disability Income
 
Many life insurance policies offer disability protection above and beyond a simple waiver of premium. In fact, some offer disability income replacement. This rider provides monthly income if you suffer a long-term disability that prevents you from working.
This type of rider usually increases your premium because it’s essentially an additional form of insurance. However, it may make sense if you don’t have group disability insurance through your employer, or if you don’t have an individual disability policy.

Guaranteed Insurability
 
Buying insurance when you’re young and relatively healthy? You may want to consider this rider. It allows you to buy additional insurance in the future without having to go through underwriting. That could be invaluable if you have an increased need in the future but your health has declined. Even if you’ve been diagnosed with cancer or suffered a heart attack, you have the option to increase your coverage with this rider.

Accelerated Death Benefit
 
This is another rider that’s fairly common and is often included in the base policy. The accelerated death benefit rider advances a portion of your death benefit in the event that you are diagnosed with a terminal illness and short life expectancy. Each insurer has its own rules about what qualifies as a short life expectancy.
You can use the funds to pay medical bills, living expenses, debt or more. Your policy will state the maximum amount you can take as an accelerated benefit. However, this could be a valuable benefit to help you and your family during a difficult period.

Return of Premium
 
This rider is offered on term policies and is attractive to those who are worried about losing their premium payments. Clearly, outliving your term policy is always a good thing. However, you may not feel good about paying for years of insurance and not having anything to show for it at the end of the term. That’s often the case with term insurance, as those policies usually don’t accumulate cash value.
As the name suggests, this rider returns a portion of your premiums if you outlive your term policy. The rider will likely increase your premium amount, however, so be sure to do a careful cost analysis to determine whether it’s worthwhile.
 
Ready to plan your life insurance protection strategy? Let’s talk about it. Contact us today at DSM Financial. We can help you analyze your needs and choose the policy that’s right for you. Let’s connect soon and start the conversation.
 


1http://disabilitycanhappen.org/disability-statistic/
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
17964 – 2018/9/4

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