Life Insurance Riders and Supplemental Benefits

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When you invest in a life insurance policy there are a variety of supplemental benefits that are also available. Generally, with the inclusion of a rider there will be a supplemental charge in addition to the necessity for the party looking for this form of insurance to provide evidence that they are in fact insurable.

Listed below are a few of the more common riders available today:

Waiver of Premium

A waiver of premium means that the company you are insured with will ensure that your policy is kept in force with no requirement to pay further premiums should you become ‘totally disabled' prior to the age of either 60 or 65, on conclusion of an initial waiting period. The terms of the rider will determine the meaning of ‘total disability'.

For as long as the disability continues, your premiums will be waived, and policy benefits which include dividends (if payable) and cash values will continue in such a way to reflect that you'd already paid the premiums. This type of coverage is in essence a disability benefit. It is not only inexpensive but also a good investment.

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Automatic Premium Loan Provision

If the premium which is due has not been paid by the conclusion of the pre-ascertained grace period, then the automatic premium loan provision will allow for a policy loan to be made from the cash value of the policy in order to pay the outstanding premium.

What this does is helps to prevent any unintentional lapse with respect to the policy. It's frequently recommended because of the variety of circumstances whereby a premium payment remains unpaid.

The cash surrender value has to equal the loan amount, at minimum, plus a year of interest. The provision can be surrendered at any time by the policy owner and must initially be elected by them.

Waiver of Mortality Deduction Charges

This rider operates in a similar fashion to the waiver of premium with one exception – it is available with flexible premium universal life policies.

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Disability Income

After an initial waiting period, disability income will provide a monthly income during any period of total disability. The benefit is limited to a certain percentage of death benefit.

Accidental Death Benefit

This provision offers an additional amount of insurance should you as the insured party die because of an accident. A number of accidental death benefits will provide for two to three times the face value of the policy for accidents which are originally itemized in the terms.

However, accidental death must occur in advance of a particular age which has been previously specified. It should be noted that death due to illness is excluded.

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Guaranteed Insurability

This insurance rider allows you to invest in a stated amount of additional insurance up to a certain age (usually 40) at specified intervals. There is no requirement to present evidence of insurability.

Guaranteed insurability riders also offer alternative dates whereby you can obtain added insurance when your requirement for insurance coverage might increase. For example, on the birth or the adoption of a child or upon marriage. The option allows you to invest in supplemental coverage irrespective of your own health status.

Cost of Living Rider

The cost of living rider permits you to opt for more insurance each year in order to offset the rising cost of insurance due to inflation. The amount which is available for purchase is based upon the cost of living index. Evidence of insurability is not required and cost of living riders are generally available at low rates.

Payor Benefit Rider

A policy rider can be added to a juvenile's policy which states that if the payor (the one who is responsible for the premium) either becomes ‘totally disabled' or dies before the juvenile reaches maturity, then the subsequent outstanding premiums are automatically waived.

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Spouse Rider

The spouse rider offers level term coverage to the spouse of the insurer. The rider also gives a conversion provision which allows the insurer's spouse to avail of permanent insurance coverage without the requirement for evidence of insurability.

This conversion must take place prior to the rider's termination, or before the death of the insured party.

Children's Rider

Your children can gain level term coverage with a child's insurance rider. This rider is normally offered at a single premium rate and is available to cover both newborns as well as adopted children.

The children can be added to the coverage and there is no increase on the cost of the premium that you pay. The children's rider will also allow for a conversion process.

This grants each child the option to convert to permanent insurance coverage without the requirement of proving insurability, providing that the plan is taken out prior to either the rider's termination or the death of the insurance policy holder under the basic policy.

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Term Riders

The term rider offers temporary insurance coverage which can be attached to a currently existing permanent policy or an interest sensitive insurance policy.

The term rider will provide extra insurance protection over a pre-determined period of time. This can be useful if you require more insurance coverage, or if you prefer to decrease your coverage over a limited time period.