The riders are something to seriously consider when buying an insurance or annuity policy. These are special clauses that can be attached to your policy to add a benefit that does not otherwise exist. Mostly, riders are optional and you have to pay extra for them.
Factually speaking, there are two kinds of riders - basic and special.
These are riders that nearly every insurance company offers.
Terminal Illness Rider: It provides a portion of the life insurance policy death benefit paid to the insured upon the insured being diagnosed as having a terminal illness that will result in death within12 months. There is no additional charge for this rider, but the withdrawal provision may be used only once over the duration of the contract. This generally comes automatic with most life insurance policies and does not cost you extra.
Waiver of Premium (WP): Offers that if you become totally disabled, the company will waive monthly premiums for the base plan and all riders. Usually there is a waiting period of 90 days before this benefit commences.
Accidental Death Benefit (ADB): Offers extra coverage if the insured dies of injuries sustained in an accident within a certain period of time. It is also called Double Indemnity Rider.
Children's Insurance Rider (CIR): Another optional rider that offers limited term life protection for your children under a specific age, usually 18 or 25.
Guaranteed Insurability Rider: It allows you to purchase additional insurance coverage on top of your base policy in the stated period without the need for further medical examination. This rider is most beneficial when there has been a significant change in your life circumstances, such as the birth of your child, marriage or an increase in your income. Another advantage is that in case your health state declines with increasing age, you will be able to apply for extra coverage without giving any evidence of insurability. Confirm the age limit on this rider before purchasing it.
Return of Premium Rider: Refunds all the premiums at the end of the term. Insurers sell this rider with many variations, so verify the phrasing of the rider before you buy.
You look for these riders when you need special coverage along with your life or annuity policy. Not every insurance company offers them. At this point either you should know where to go or you should contact an independent life agent or broker, who can look through various companies to get you the right kind of coverage.
Disability Income Rider (DI): Provides monthly benefit amount in the event the insured becomes totally disabled. Again there is a waiting period before the benefits start.
Critical Illness Rider: Offers 100% of your term life policy in a lump sum payment for
* Heart Attack
* Life Threatening Cancer
* Kidney Failure
* Terminal Illness
* Major Organ Transplant
* HIV Infection (for medical personnel)
* Coronary Bypass (10% of the benefit)
Long Term Care Rider: In the event that the insured's bad health compels him or her to stay at a nursing home or receive home care, this rider offers monthly payments. Although long-term care insurance can be bought individually, insurance companies also offer riders that take care of your long-term care costs.
Please keep in mind to confirm what you are actually buying. Different insurance companies may have certain exclusions you should know about before signing up.
More and more insurance companies are getting creative about offerings riders. It is always a good idea to talk to your insurance agent on what may best suit you.
Important: All Riders are subject to state and plan availability.
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PLEASE NOTE: By law, agents and brokers offering life insurance products cannot charge fee for service from a client. Therefore, your premium is exactly what an insurance company quotes.