Life insurance riders are an easy and affordable way to get additional coverage, without additional applications or exams. Find out why you might need one.
Life insurance riders are a convenient and cost-efficient way to get additional coverage, without having to complete additional applications or exams. Some types of life insurance riders can be added or dropped at any time, even if you've purchased the life insurance policy years ago. Others are only available when your life insurance policy is first issued.
Read on to learn about the different types of life insurance riders and why you might need them.
Accidental Death Benefit Rider on a Life Insurance Policy
Injury is the leading cause of death among those ages 1 to 44 years old, according to the Centers for Disease Control and Prevention.1 While we can't predict accidents, we can prepare for them.
The Accidental Death Benefit Rider on your life insurance policy available through by AIG Direct, pays a death benefit in addition to the death benefit your loved ones would already receive from your life insurance policy. The accidental death rider benefit amount can be as much as $250,000 or the face amount of the policy to which it's attached (whichever is less). AIG Direct also offers "Accidental Death and Dismemberment Insurance" (AD&D Insurance), which is a great consideration if you're seeking greater coverage (in some cases as much as up to $250,000 coverage). But one of the greatest advantages of buying the accidental death benefit rider is that you have both life insurance and an accidental death benefit covered under the same policy. This type of rider must be purchased at the same time as your life insurance policy is issued.
Should you pass away from a covered accidental injury, you can rest assured that your loved ones won't have to bear the financial burden of funeral costs or medical bills alone.
Child Rider on a Life Insurance Policy
You've just added a little one to your family and have a new appreciation for life (and coffee). Maybe you already have a life insurance policy in place, but want to add your child onto your policy, too. The Child Rider on your life insurance policy available through by AIG Direct, allows you to add children to your policy starting as early as 15 days old, all the way until their 19th birthday.
The Child Rider pays a pre-determined death benefit to the insured parent, should the unthinkable happen to their child. The money from the child rider benefit can help to ease the financial burden on families during an already emotionally difficult time.
You can even add multiple children under the same child rider so, as your family grows, your policy can, too.
Terminal Illness Rider on a Life Insurance Policy
Terminal illness can take a physical, mental and financial toll on the person who is diagnosed. That stress is also shared among those who love the patient most — his or her family.
The Terminal Illness Rider on your life insurance policy available through by AIG Direct, can help provide patients and their loved ones with some financial relief. If you meet the requirements, it can also be used during your lifetime, when you may need it most. It offers a one-time acceleration of up to 50 percent of the death benefit from your life insurance policy (not to exceed $250,000). A one-time administrative fee (not to exceed $250) will reduce the amount received. Other than that fee, the Terminal Illness Rider available through AIG Direct comes at no additional cost to you.
That money could help to cover outstanding debt from treatment, doctors' visits or hospital stays, among other things. Once you've qualified to receive the benefit payment, there are no restrictions on how you use the funds. But, most importantly, the terminal illness rider can help to lift some of the financial stress off of you and your loved ones so they can focus on what matters most — spending time with you.
Waiver of Premium Rider on a Life Insurance Policy
Total disability can bring sudden, unexpected changes to the lives we once knew. In these situations, it's difficult to know what steps to take first. A Waiver of Premium Rider on your life insurance policy available through AIG Direct, can help to ensure that at least one expense is taken off of your shoulders — your life insurance premium. With a waiver of premium, your coverage will continue, but you no longer have to make your premium payments.
If you become totally disabled, you might be able to waive your life insurance payment, along with the payment for any riders attached to it. This waiver of premium rider is available to those whose life insurance policies have a face amount equal to or greater than $100,000. It must be added at the same time as your policy is issued, but you have the option to drop it at any time.
No two people are exactly alike. Life insurance riders can be a great way to customize a life insurance policy to your unique situation. To determine which type of life insurance riders might best suit your needs, call one of our licensed, professional life insurance agents at 1-800-294-4544.
1 Key Injury and Violence Data; Centers for Disease Control and Prevention; Web (https://www.cdc.gov/injury/wisqars/overview/key_data.html); Accessed October 2018
Important Consumer Disclosures Regarding Accelerated Benefit Riders
An Accelerated Death Benefit Rider (ABR) is not a replacement for Long Term Care Insurance (LTCI). It is a life insurance benefit that gives you the option to accelerate some of the death benefit in the event the insured meets the criteria for a qualifying event described in the policy. The rider does not provide long-term care insurance subject to California insurance law, is not a California Partnership for Long-Term Care program policy. The policy is not a Medicare supplement.
ABRs and LTCI provide different types of benefits. An ABR allows the insured to access a portion of the life insurance policy’s death benefit while living. ABR payments are unrestricted and may be used for any purpose. LTCI provides reimbursement for necessary care received due to the inability to perform activities of daily living or cognitive impairment. LTCI coverage may include reimbursement for the cost of a nursing home, assisted living, home health care, homemaker services, adult day care, hospice services or respite care for the primary caretaker and the benefits may be conditioned on certain requirements or meeting an elimination period or limited by type of service, the number of days or a maximum dollar limit. Some ABRs and all LTCI are conditioned upon the insured not being able to perform two or more of the activities of daily living or being cognitively impaired.
This ABR pays proceeds that are intended to qualify for favorable tax treatment under section 101(g) of the Internal Revenue Code. The federal, state, or local tax consequences resulting from payment of an ABR will depend on the specific facts and circumstances, and consequently advice and guidance should be obtained from a personal tax advisor prior to the receipt of any payments. ABR payments may affect eligibility for, or amounts of, Medicaid or other benefits provided by federal, state, or local government. Death benefits and policy values, such as cash values, premium payments and cost of insurance charges if applicable, will be reduced if an ABR payment is made. ABR payments may be limited by the contract or by outstanding policy loans.
