A rider is the additional coverage can be added to your existing life insurance policy. The two most common riders offered by life insurance companies are the waiver of premium and accidental death benefit riders. These two riders are two hidden benefits of life insurance. If you opt for these riders by paying more, it can make a big difference.
Waiver of premium rider is probably the most popular rider added to a life insurance policy. For a very small fee, usually a few cents per $1000 of life insurance, you can purchase a waiver of premium rider which will become part of your life insurance policy. It is a type of disability insurance added to your life insurance. If your life insurance policy has a waiver of premium rider, if you become disabled before a certain age and the disability lasts longer than six months, then the insurance company will waive the premiums. You don’t have to pay the premium but your coverage will continue for the term of your policy as if you never missed a payment. Generally this waiver is retroactive to the beginning of the disability. Any premiums made during the disability are usually refunded. When the disability ends, you continue to make the premium payments as if nothing ever happened. There is no requirement to pay the dividends that were not paid during the disability period. You are considered disabled if you are not able to perform the regular and normal duties of your job. Sometimes this rider comes with a tied provision disability insurance income. The life insurance company will waive the premiums on your life insurance policy, and it will also pay your normal, monthly income as if you were working. The other most common rider is the accidental death benefit rider. This is sometimes referred to as the double indemnity clause. If you add a double indemnity rider, the life insurance company will pay to your beneficiary twice the face amount of your policy if die in an accident. You can also add a triple indemnity rider for certain life insurance policies. If you had a triple indemnity rider, the amount would be thrice the face amount.
You have to pay extra for each of these riders but they may well be worth the minimal extra cost. But before you buy these riders, make sure you read the conditions of these riders carefully and understand what constitutes disability and what an accidental death is.
