What Are Life Insurance Riders And Do You Need Them?
If you are currently looking into a life insurance policy and are hoping to customize it to fit your exact needs, you may want to talk to your insurance agent about adding some riders to your policy. A rider is an extra type of coverage you can add to almost any type of insurance policy, and it is designed to give you a certain type of protection that is not covered in the policy you have selected. Here are several things to understand about riders with life insurance policies.
What Are Riders?
A rider is something you can add to almost any type of insurance policy, and you might be able to understand how this works with life insurance through an example of a home insurance rider. If you have home insurance and own a $50,000 piano, you would have to purchase a rider for your home insurance policy to have this piano covered by insurance. Your standard home insurance policy would not cover the piano if a fire destroyed your house unless you had this particular rider in place.
Riders work the same way with life insurance policies. They are extra types of coverage you can add on to your existing life insurance policy, and they give you the extra types of coverage you may need. Adding riders allows you to customize your life insurance policy to fit your specific needs.
How Do They Affect Your Premiums?
Just like with any type of insurance, adding a rider to your life insurance policy will increase the costs. The cost of a life insurance policy is hard to determine without getting a quote, and this is because the costs depend on many things, including:
- The type of insurance policy – The two most common types of life insurance are term and whole life. Whole-life policies are typically more expensive than term-life policies.
- Age – Younger people pay lower premiums for life insurance, because they have more years to pay into the policies.
- Health – Healthy people will pay less than people who have major health problems.
- Family history – Your family history can also result in paying more or less for your life insurance.
The cost of your policy may also be affected by your gender, occupation, and habits. In addition, you will pay more if you add riders to the policy.
What Types Of Riders Can You Add To Life Insurance Policies?
There are a variety of different riders you can add to your policy, but here are some of the more popular types:
- Long-term care – If you are worried that you may end up in a nursing home at some point, you could purchase a rider for this. The rider would provide payments to the nursing home if you experience this need, and this could help protect your family from financial issues related to the cost of nursing home stays.
- Guaranteed insurability – Another common rider is called guaranteed insurability, and this gives you the right to renew your insurance policy without problems if you develop a major illness or health problem. With this rider, you may not be required to undergo a health examination or answer questions about your health in order for you to renew your policy.
- Waiver of premium – A third popular rider is one that will allow you to waive your premium payments if you become unable to work.
Keep in mind that you will have to pay an additional fee for each rider you add, but this might be worth the extra money to you.
If you are interested in getting a life insurance policy, contact an insurance agent like those from Matt Roenker Insurance Agency. He or she can help you select and customize a plan that fits your budget and needs.
