Common Life Insurance Riders

To help you understand life insurance, we have provided a brief, general description of some commonly available types of life insurance riders. Note that rider terms may vary from company to company, from state to state, and from policy form to policy form, even between forms of the same company. Always consult your policy for the exact terms of your coverage.

Riders

Riders are special additions to the policy provisions that offer benefits not found in the original contract, or that make adjustments to it. These special provisions are, in effect, attached to the policy. Riders are not necessarily found in all policies. Because all riders provide some kind of benefit to the policyowner, an extra premium may be charged for them.

Accelerated Death Benefit

Many companies offer an Accelerated Death Benefit Rider for life insurance policies. This rider may allow insureds who are diagnosed as terminally ill, or who require long term care, or permanent confinement in a nursing home, to collect all or part of the death benefit from the policy on their life while they are still alive. The rider specifies exactly how much of the death benefit may be available.

This can help relieve some of the financial burden caused by an insured's inability to continue working and the rising cost of health care.

Death benefits payable under the policy are reduced by any amounts paid under this rider.

Accidental Death Benefit Rider

An Accidental Death Benefit Rider may be added to a life insurance policy to provide for an additional amount to be paid to the beneficiary should the insured die as the result of an accident. This amount is usually the same as the death benefit of the policy and is, therefore, often referred to as double indemnity. The Accidental Death Benefit can be paid only when the insured dies as the result of an accident.

Accidental Death and Dismemberment Rider

An Accidental Death Benefit Rider to a life insurance policy may also include an additional benefit for Dismemberment. In that case, it's called an Accidental Death and Dismemberment (AD&D) Rider. The AD&D Rider usually provides that the accidental death benefit will also be paid if the insured loses sight in both eyes or suffers the loss of any two limbs. Sometimes a smaller amount may be paid for the loss of sight in one eye or the loss of one limb.

Disability Income Rider

The policyowner can secure a regular monthly income from the insurance company should he or she become totally and permanently disabled with a Disability Income Rider. Usually covering policyowners who are also the insured, the Disability Income Rider guarantees a specified level of income for either as long as the disability lasts or a time frame specified in the rider.

Guaranteed Insurability Rider

The Guaranteed Insurability Rider allows the policyowner to purchase additional coverage at certain stated intervals (either age or policy year options) without requiring further evidence of insurability. This coverage could be very significant when an insured has become uninsurable sometime after the initial policy was issued and would be otherwise unable to obtain additional coverage.

Level Term Rider

A Level Term Rider provides a fixed amount of term insurance that is added to a permanent life policy for a specified period of time. Generally, a level term rider is written for an amount that may be up to three or even five times the death benefit of the permanent policy to which it is attached.

Waiver Of Premium Rider

One of the most common riders attached to a life insurance policy provides for Waiver of Premium. Prompt premium payment is the major responsibility of the policyowner. Since premium payment is generally necessary to keep the policy in force, it follows logically that even if the policyowner becomes disabled, the premiums must still be paid or the policy will lapse.

Disability often results in the inability to work and earn income - income needed to make premium payments. The Waiver of Premium Rider exempts a disabled policyowner from making premiums payments during the term of the disability while keeping the policy in force.

How a waiver of premium rider works may vary from company to company and from policy to policy. The policyowner may be exempt from paying premiums while disabled, but there will likely be conditions, such as length of time of disability, that must be met first before benefits from this rider can be triggered.