What Is a Life Insurance Rider?

A life insurance rider provides add-on benefits to your insurance policy. Riders are a great way to customize your life insurance to address a specific need.

If you want to customize your life insurance coverage, using one or more riders is the smartest way to do so. Simply put, a rider is a specific amendment to your main policy that covers a stated situation.

You have to pay for riders, but there’s no better or more effective way to tailor-make a policy based on your particular financial needs.

Key Takeaways

You can purchase additional benefits for an existing life insurance policy
These benefits, called riders, add very little to your current premium
Riders are an ideal way to customize an existing life insurance policy
There are dozens of life insurance riders. The most popular are: return of premium, child term, long-term care, accelerated death benefit, family income, waiver of premium, accidental death, and guaranteed insurability

Here’s a short summary of the eight most common riders, but there are many more, so be sure to speak with your insurance professional to see which ones are best for you, what the additional costs are, and how soon you can get them added into your coverage.

Accelerated Death Benefit Insurance Rider

These riders can contain complex legal conditions, but in their simplest form, they allow the insured to receive at least a portion of the death benefit after being diagnosed with a terminal medical condition.

The accelerated benefit can be used while the policy holder is still living, and can amount up to 50 to 80 percent of the policy value.

Child Term Rider

A child insurance rider usually covers all current and future children in your household for a small premium.

If a minor child dies before a designated age, a policy with a child term rider will pay a specific death benefit. If the child does not die, you can convert the policy into a more traditional kind of permanent life coverage with no need for medical underwriting.

Long-Term Care Insurance Rider

This kind of rider offers the equivalent of long-term care coverage without the need of having to buy a separate policy. It covers the insured person’s care expenses, such as nursing home care or home health care.

Return of Premium Insurance Rider

If you outlive the term of you life insurance policy, you receive the premiums you paid in, minus a small add-on cost to each premium, when the policy’s term is up.

Return of premium riders usually increase the cost of your life insurance premium substantially.

Guaranteed Insurability Rider

This rider is also called Guaranteed Purchase Option. During a stated time period, you can purchase more coverage without a medical exam.

Parents who plan on having large families typically use these riders to bump up their insurance coverage as their families grow.

Accidental Death Insurance Riders

Sometimes called “double-indemnity” riders, they allow for a doubled death benefit in the case of accidental death.

Waiver of Premium Rider

Often legally complex, the primary form of this type of rider lets totally disabled individuals stop paying their policy premiums. Premium waivers are especially valuable for sole income earners who have higher-than-average policy premiums.

Family Income Benefit Rider

Replaces a sole earner’s regular income so the surviving family members don’t face severe financial problems.

Are Life Insurance Riders Worth It?

In some ways, life insurance riders are similar to an option on a new vehicle. They’re worth the expense if they fulfill a particular need or desire you have. That’s why it’s important to spend time deciding whether you need a rider, what kind of advantages it delivers, and if it makes sense for you in terms of added premium expense.

For the majority of policyholders who choose to purchase a rider, there’s good value in the deal because they’re able to personalize their policy for a small premium increase.

It’s best to speak with your insurance agent if you need help understanding a particular rider or want to know whether it suits your needs