If you have decided to purchase life insurance, then you probably already know the value of getting the right policy. There are hundreds of options out there, different insurance providers and different policies. Despite the choice, it can still be difficult to get a policy that exactly meets your needs.
If you have found it tricky to find a policy that suits you, then it could be time to start looking at riders.
A rider is an extra feature that can be added on to a policy so that it becomes better suited to the insured party. The types of riders available, and what is included in the rider will vary according to the insurance provider.
You may also discover riders vary in price, but you will usually find that most of them are 5-10% of the base policy price. Most insurers don’t have a limit on how many riders you can add to a base policy, which can make it easier to tailor your life insurance to exactly suit you.
Just be sure that the extra amount you are paying for the rider is likely to pay off in the end.
Useful Riders
Disability Income Rider
This works on the same principle as income protection insurance. It provides you with a paycheck if you are unable to work due to becoming disabled. Check whether the payouts continue for the length of the disability, or for a specified period of time. Also check whether you will only be covered if your disability is the result of an accident, as this can often be a sticking point.
Critical Illness Rider
This offers an early payout from your policy if you become critically ill. Check which illnesses result in a payout before you sign up. The payout can be used for anything – from overseas medical care, to specialist treatment, to just paying the bills.
Return of Premium Rider
Many people worry about paying a whole load of money into their term life insurance, and then not getting anything back from it. If you outlive your term policy, then there is a chance this could happen to you. Choosing this rider means that even if you outlive your policy, you can still get your premiums back.
Term Conversion Rider
This rider works on the same principle as the one above. No one wants to lose all the money they have paid into their life insurance without getting any benefit from it. This rider allows you to convert your term policy into a permanent life insurance policy, allowing your life insurance cover to continue without losing out. Be sure to check if there is a deadline to the conversion. In a pinch, the provider’s website is a good place to look for policy details.
Guaranteed Insurability Rider
As you get older, the chances of something bad happening inevitably get higher. If you become ill or injured, it can be difficult to get further insurance should you need it. This rider allows you to purchase extra life insurance without you having to prove your insurability or taking a medical test. You will usually be given the opportunity to buy extra insurance when you reach certain ages, or every few years on the policy.
Accelerated Death Benefit Rider
Working in much the same way as the critical illness rider, this rider offers an early lump sum payout from the policy if you become terminally ill. Usually, the payout will be available to you if you have less than a year to live. Check how much the payout is – it will usually stand at around $250,000 to $500,000, but this will depend on your policy and the insurance provider.
