Life insurance riders offer a fantastic way to gain added benefits and utility from a life insurance policy. While you’ve probably heard of some of the more popular ones—like accidental death and dismemberment—there are many more obscure benefits you might never have heard about.
- Return of premium rider: The goal of a term insurance policy is to cover you for a certain period of time, then coverage can terminate. While that is a great, inexpensive way to get temporary coverage, it does mean that there’s a chance that all your premium dollars will be spent on a policy that never pays out to your beneficiaries. If that feels like an unacceptable risk to you, then you can add a return of premium rider to your policy that ensures you will get all your premium dollars returned to you upon termination of the policy, as long as every payment is made on time.
- Disability income rider: If you suffer from a permanent disability at some point in the future, you may need extra income to make up for lost work. With a disability income rider, you can be paid a small percentage of your total death benefit every month after you’ve been disabled for six months. With this rider the income can continue to a set age or last an entire lifetime. Additionally, triggering the disability income rider will waive your future policy premiums.
- Long-term care rider: Long-term care policies are expensive, but the benefits they provide are enormous when you compare them against the expense of paying out-of-pocket for nursing home care. Still, not everyone can afford an expensive policy that they may or may not end up needing. Luckily, you can get the benefits of a long-term care policy at a much lower expense through a long-term care rider on your life insurance policy. The tax-free benefits are an acceleration of your total death benefit and any unused portion is still paid out to your beneficiaries upon your death.