What is a Life Insurance Rider?

A life insurance rider extends the coverage offered by a life insurance policy. Insurance riders are available to cover a variety of situations, allowing the consumer to change the policy as his or her circumstances change. The cost of a life insurance rider typically is small, offering the insured individual an affordable way to customize his or her policy.

The specific terms and conditions of a life insurance rider vary, so it is essential for the consumer to understand the fine print with insurance add-ons. The rider might be terminated when a claim against it is filed, but the original insurance policy could continue as written. Other riders might expire after a certain amount of time or at a designated age. There are many common additions available for life insurance policies, but they might not be available from all insurance companies or in specific regions.

Certain insurance riders extend life insurance coverage to other members of the family. A spouse insurance rider might offer a more affordable option for term life insurance for a spouse over buying a separate policy. Child riders pay a benefit for the death of the named child. This rider can sometimes be converted into a permanent insurance policy for the child.

A waiver of premium rider allows the policyholder to skip the premium payments should he or she face permanent disability as defined by the rider. It also might apply in situations of lost income because of an injury or illness. This rider prevents the insured from losing life insurance coverage if his or her income is lost or reduced because of the disability.

An accelerated death benefit allows the policyholder to receive part of the death benefits if diagnosed with a terminal illness. This life insurance rider typically requires that the insured individual's lifespan will be cut short because of the terminal illness. The money received is deducted from the amount that the beneficiaries would receive at the time of death.

Medical exams are required for most health insurance policies. As an individual ages, his or her health might deteriorate and make it more difficult to secure an affordable health insurance policy. The guaranteed insurability rider allows the policyholder to add more coverage to the basic policy without submitting to another medical exam. The policyholder can easily add more coverage if his or her financial or personal situation changes. This life insurance rider might become void at a set age, depending on the specific terms.

The cost of insurance amendments through a life insurance rider varies based on the specific terms of the rider and the insurance company. Evaluating the specific needs of the family and the additional cost helps identify the best rider options for each individual. A consultation with an insurance professional allows the consumer to gain a better sense of the riders available and the options that will be the most beneficial based on individual circumstances.