Common Life Insurance Riders

Not all life insurance policies are created equally. By adding riders, you can completely customize your term life policy. A rider is a clause that is added to a policy that changes the coverage provided. A rider can add or remove coverage. Let’s take a look at some of the common riders.

• Child Rider
  This rider is typically added to a parent’s policy, and provides a benefit in the event of a death of a child listed on the policy. The amount of coverage is usually lower than what an adult would need, because children do not have dependents. It can actually be preferable to add a child rider to an adult’s policy rather than issuing an entirely new policy for the child, which would have an additional policy fee.
• Accidental Death & Dismemberment (ADD)
  Some policies allow the ADD rider, which pays an additional benefit if the insured dies or loses a limb or two in an accident. I usually do not recommend adding this rider because your family doesn’t need more money just because you died in a car wreck rather than from a heart attack. Any property damage involved in the death would most likely be covered under some kind of property insurance, such as auto or homeowners. The increased premium usually does not justify the small increase in the amount of the death benefit. Additionally, if you are a member of a credit union, you may already have a stand-alone ADD policy.
• Terminal Illness
  This rider allows you to receive an early payout of your life policy in the event that you are diagnosed with one of several pre-defined illnesses or conditions. Some companies require that the insured be given one year or less to live (cancer); others will pay out regardless of the prognosis (heart attack, stroke). This is a handy rider that helps to replace lost income during illness and to help pay medical expenses.

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