Life insurance riders: What to know

A life insurance policy can help financially protect you and your loved ones, such as if you pass away earlier than expected. While there are many decisions to make regarding the type of life insurance policy you might purchase, it's not just a matter of, say, choosing term over whole life insurance. There are also many considerations to make regarding adjustments to standard policies.

Specifically, you can add life insurance riders to essentially customize your policy. While these might come with additional costs, that might be worth it to you, if you can potentially increase benefits paid out to those making claims.

If you're in the market for life insurance then reach out to a professional today who can help you get started with a free price quote.

Here, we'll take a closer look at what life insurance riders entail and why you might want to add them when shopping for a life insurance policy.

What is a life insurance rider and how does it work?

A life insurance rider, also known as an endorsement, is an amendment to a standard life insurance policy. Think of them as optional add-ons.

If you're looking for extra protection for certain types of risks, like accidental death, then you might add a life insurance rider. Or you might want to amend your insurance policy to include some potential payouts during your lifetime if you get sick.

You can get quotes for different riders during your initial life insurance purchasing process. Generally, that's the time to choose riders, though some providers might offer opportunities to add or remove riders on an existing policy.

Use the table below to explore providers and options now.

How much does a life insurance rider cost?

Life insurance rider costs can vary significantly, depending on factors like the type of rider and the policy you have.

In some cases, the rider could cost more than the standard premium. In other cases, it could be an optional add-on at no additional cost. Or it could be a small percentage of your base premium.

Because there's so much variability, it's tough to generalize. Consider getting a quote to see what applies to your situation.

Popular types of life insurance riders

There are many types of life insurance riders, and what's included vs. being an amendment can differ among insurers. So, you'll likely want to compare your options and clarify with providers.

Some of the more popular types of life insurance riders you might come across include:

• Waiver of Premium: If you can't pay your premium due to a disability that prevents you from working, then this rider could come into effect to cover your premium. That way, you won't lose your life insurance policy.
• Accelerated Death Benefit: This type of rider can help you get some cash out of your insurance policy while still alive, such as if you're diagnosed with a terminal illness. Sometimes this benefit is included with regular policies, but it could also carry additional charges.
• Accidental Death: In the unfortunate event that you pass away due to an accident, rather than an illness, then an accidental death rider could increase the payout that goes to your beneficiaries.
• Critical Illness: While life insurance generally pays out after someone dies, it's possible to use a life insurance rider to receive some of that benefit earlier. For example, a critical illness rider could enable you to receive some money if you face an issue like cancer or a major organ transplant. The specifics regarding what qualifies as a critical illness can vary by provider.
• Chronic Illness: Similar to a critical illness rider, a chronic illness life insurance amendment could enable you to collect some of what would be a death benefit during your lifetime. For example, if you face chronic illnesses like arthritis or dementia, that could cause the rider to kick in. Generally, though, the illness must be severe enough that you need permanent help performing at least two activities of daily living, like bathing and eating, or you need permanent care due to a cognitive issue.
• Term Conversion: This type of rider could enable you to convert a term life insurance policy into a whole life insurance policy, potentially without needing another medical exam. That might work out in your favor if it makes the whole life insurance policy cheaper than taking out a new one from scratch. Similarly, term riders can apply if you have a whole life insurance policy but want to add additional coverage for a given period, like when your kids are young.

How to determine what life insurance riders are needed (if any)

Some insurance providers offer riders that have no extra cost, like a charitable giving one that can pay an additional benefit to a charity of your choice. In that case, it might be an easy decision to go forward with the rider. Others, however, depend on what benefits/risk reduction you're looking to get out of your life insurance policy, weighed against any costs.

For example, if you're worried about what would happen financially to your family if you get sick, then you might decide that a critical or chronic illness rider is worth it.

But perhaps you're in good health with a family history of long, healthy lives. In that case, you might not choose these types of riders. Instead, you might be looking to guard against sudden death, in which case you might choose an accidental death rider, or you might stick with a standard policy.

Life insurance riders can be a great way to get the specific type of protection you're looking for. Whether you're looking to decrease the risk related to getting sick, or you want to customize your policy to include the potential for additional benefits for your family, there are many routes you can take.

Keep in mind that insurance providers might offer different types of riders at different costs, so you may want to compare your options and speak with a qualified professional to determine what works best for your situation.