What is an Insurance Rider?
Insurance riders are additional insurances that a policyholder may purchase beyond their standard insurance agreement. While you may think that you are fully-insured by a general insurance policy, some buyers may find that there are additional coverages they need to fit their service goals. Riders allow policyholders to develop an insurance plan beyond the one-size-fits-all models that fits their individual needs.
What Types of Riders Are Available?
There are many types of insurance riders available and you may find they vary by company. The costs of each of these policies are contingent upon a variety of factors, however, there are a myriad of policies available, all of which may be discussed directly with you insurance provider.
- Wavier of Premium Rider
This rider will allow you to waive your premium in case you become totally disabled and are unable to work. In the unfortunate circumstance that you should find yourself disabled, you will not need to choose between paying your premium and necessities like shelter and food. However, the waiver does come with an expiration date, usually between the ages of 60-65; depending on your provider. A secondary disability income rider may also be purchased, which will provide you regular income from the insurance company in case of major injury that finds you unable to work.
- Guaranteed Insurability Rider
The guaranteed insurability rider allows you to purchase additional life insurance without providing evidence of your insurability or taking the standard pre-insurance medical exam. This rider lets you purchase additional life insurance coverage at a later date without undergoing a medical exam or providing any evidence about your insurability. This coverage is best for those who fear that due to health issues they are or may soon become uninsurable. At predetermined intervals, you will be able to purchase additional coverage with the insurance agency, who will consider your age rather than your health as the determining factor.
- Term Conversion Rider
By now you have probably heard of “term life” insurance, but what exactly does that mean? Essentially, this plan will allow you to convert your short term coverage to permanent life insurance. So rather than coverage that will expire, you will be covered for your entire life. This means that your beneficiary is guaranteed to receive benefits whenever you pass on. This is a great option for young professionals just starting their family who don’t have the money for premium, permanent coverage but still want to make sure their family will be taken care of. However, there is a time limit on converting your policy so make sure to talk to your insurance provider before adding the term conversion rider to your plan.
How Do I Know If I Need an Insurance Rider?
The best way to determine if you should upgrade your insurance policy with a rider is to speak directly with your insurance provider. Using a local insurance company that knows you and your life will allow you to make the best decisions for you and your family. TJ Woods Insurance Agency, located in Worcester, MA, would be happy to help you with all your insurance needs. Contact us today.
To learn more about insurance riders and whether or not they are worth the additional cost, download our free guide here.
