Everything You Need to Know About Life Insurance Riders

Life insurance policy riders can be confusing. Often, people need guidance in understanding what a rider on a life insurance policy is, or what types of riders exist in life insurance. If you’re confused, you’re not alone. 

Life insurance riders don’t have to be baffling, though, and they can be important — a rider can create customized coverage that better meets your needs. You may still have questions: What is an insurance rider? What are my options? Do I need a rider on my life insurance policy? Don’t worry, we’ve got you covered. Read on for everything you need to know about life insurance riders.

What Is a Life Insurance Rider?

Pretty much everyone needs life insurance, no matter their age or life situation. But everyone’s needs differ. Because of that, life insurance coverage is not one-size-fits-all; it’s tailored to your specific context. Riders are the optional, additional features that your life insurance provider offers, and they can help you enhance your coverage. Different policy rider options allow you to customize your life insurance, tailoring your policy to best fit what you need — and what you don’t.

What Are the Different Types of Life Insurance Riders?

There are various kinds of insurance riders, but not all will make sense for your situation. Understanding the different options will help decide which best fits your needs. Note that not all riders are available for every type of life insurance coverage, and some riders incur an additional cost. The rider or riders you choose depend on both your policy and your life situation.

Here are some types of life insurance policy riders and what they cover.

Guaranteed Purchase Option

A guaranteed purchase option, also known as a guaranteed insurability rider, helps protect your options in the future. With a guaranteed purchase option rider, you’re allowed to periodically purchase additional whole life insurance up to the amount stated in the policy without undergoing a medical exam, or without providing proof of insurability.

Waiver of Premium

With this rider, if you experience a total disability that continues for at least 90 consecutive days, premiums will be waived for the duration of your disability. That means that if you’re disabled or critically ill and can’t work, your policy will remain active.

Daily Living Rider

Daily living rider accelerates a portion of your policy’s death benefit if you have been chronically ill for at least 90 days and are ill for another 90 days or longer. This rider option can help with needs resulting from chronic illness. But it’s not recommended that you cancel, reduce, surrender or replace a long-term care or health insurance policy for this rider. It’s a supplement — not a substitution. 

Living Benefit Rider

If you are diagnosed with a qualifying terminal illness, you can receive money by using a portion of the policy’s death benefit. This feature is provided at no additional cost and can be especially useful if the policyholder is very sick, disabled or experiences some other severe condition that is covered by the rider. The living benefit rider is also known as the accelerated benefit rider in some states. 

Do I Need a Life Insurance Rider?

Whether you’re looking to supplement a long-term care insurance policy or wanting to temporarily waive premiums if you become disabled, riders are useful add-ons that can help make life’s surprises a little easier.

Protect Yourself and Your Loved Ones

We know that sifting through the complex details of life insurance policies and riders can be daunting. That’s why we’re here to help. Contact your local Farm Bureau agent today to discuss coverage options for you.