5 Riders Every Agent Should Be Telling Customers About
Although a life insurance policy in and of itself can often cover the needs of an insured, today – as with many other types of products and services – life insurance can essentially be “customized” to more closely match specific goals that an individual may have.
This can typically be done by simply adding a rider to a policy. Sometimes, the rider will need to be added at the time of application, and in other cases, life insurance riders could be added to an already existing plan.
While there are a long list of insurance policy riders available today, there are five in particular that you really should be discussing with your clients, as they tend to offer the most benefit to the policy holder. These include:
Long-Term Care Rider
With a long-term care rider, the insured will have the benefit of available funds for a long-term care or nursing home need, yet without having to purchase a separate long-term care insurance policy.
This can basically save an individual a substantial amount of money in additional premium, and it can provide them with two forms of protection – life insurance and long-term care – all from within just one single plan.
Critical Illness Rider
The critical illness rider provides the insured with a lump sum of cash if he or she is diagnosed with a covered disease or illness that is specified in the policy. Examples of these can include cancer, stroke, or kidney failure.
It is important to note here that rather than reimbursing the individual for actual medical expenses like a health insurance policy, this rider will provide funds for the insured to use for any reason that they choose – even if it is not medical in nature.
Waiver of Premium Rider
This rider can alleviate the insured from making premium payments if they become disabled or ill before reaching a certain age and they are not able to afford the policy’s premium payments. With this option, there is usually a waiting period once the illness or disability begins – and the insured must typically provide proof that they are disabled or ill.
If the policy is a permanent plan, even if the insured has stopped paying their premiums, the cash value can continue growing, and / or the policy dividends can continue being paid.
Return of Premium Rider
The return or premium rider can be placed on certain term life insurance policies. This rider requires an additional amount of premium to be paid, and if the insured survives through to the end of the policy’s time frame – or “term” – then they will receive back all of their paid-in premiums.
With this rider, provided that an insured does live through to the end of a policy’s term and receives their premium dollars back, it is as if they had obtained free life insurance throughout that entire time period.
Accelerated Death Benefits
Accelerated death benefits, also referred to as living needs or living benefits, can provide a terminally ill insured to access a portion of their life insurance death benefit while they are still living. These funds may be used for paying medical bills – or for any other need that they choose.
Although the amount that is used will reduce the amount of benefit that is eventually paid out to the person’s beneficiary, this rider can allow an individual funds when they are truly needed – especially if there are no other sources available.
Knowing that these and other riders are available can help to provide clients with coverage that is much more suitable to their specific needs – both now and in the future. Adding one or more of these riders to new or existing coverage can also make the difference between meeting or not meeting clients’ ultimate financial goals.