Life insurance is a financial umbrella that every adult should have in order to avoid monetary woes after a catastrophic circumstance such as death or disability. A standard life insurance policy will pay your family or beneficiary a set sum of money after your death. However, you can enhance your protection by adding riders to your insurance policy to make sure that your family will not be left penniless in case you die or suffer from a long-term disability.
The following guide explains the most common types of riders and why you should consider adding them to your life insurance policy.
As you get older and your health changes, you may begin to worry about whether or not a standard insurance policy provides enough protection if you pass away and your family is left to contend with medical bills. Some insurance companies will enable you to add a guaranteed insurability rider that allows you to buy additional coverage without undergoing a medical exam.
If you are at a high risk for conditions such as heart disease or diabetes, a guaranteed insurability rider will prevent you from being declined for insurance if your health suddenly declines and you need more life insurance coverage.
A critical illness rider also helps those suffering from long-term diseases. It will provide you with a lump sum of funds if you are diagnosed with serious conditions such as cancer, kidney failure or a stroke. The rider will specify what diseases and conditions will be covered.
A disability rider will pay out funds if you are completely unable to work after you become disabled. Some insurance companies have riders that only provide funds if you become disabled due to a specific incident such as a car accident. However, there are companies that will pay out no matter what caused you to become disabled.
While the mere thought of losing a child is horrific, thousands of children die each year due to accidents, disease or violence. A child protection rider can help you cope with financial burden after the loss of child by providing funds to cover funeral or medical expenses. You may need to provide a health profile of your child from a doctor in order to qualify for this type of rider.
If you are worried that your life insurance policy's worth does not match your cost of living and will not provide enough funds after you die or if you suffer a disability, you can purchase a rider that enables you to add more insurance to your policy based the current Consumer Price Index.
Some life insurance policies expire when you reach a certain age. If you never get sick or need to rely on the insurance policy for quick funds in a health crisis, a return of premium rider stipulates that the insurance company will reimburse you for all of the money that you spent on premiums over the years.
So if you have a life insurance policy that will expire at some point, make sure to add a return of premium rider, especially if you are in excellent health and not at a high risk for any major diseases.
For more information, talk with a professional that sells life and health insurance policies.