February 27, 2011

Cheap Life Insurance with Policy Riders

One way to decrease the amount you pay on life insurance premiums is to bring down the coverage and add a rider or two. A rider offers the policyholder an additional benefit. Riders are not found in all policies and may be purchased for an extra premium. Purchasing a rider, however, is relatively cheaper than purchasing more coverage on life insurance, since it involves a less tedious underwriting process.

                                rider insurance
According to Investopedia, a rider is a provision in an insurance policy allowing for amendments to its terms and/or coverage. Riders are condition-specific. This means that only on event of a specific condition, will the coverage be paid.

There are several types of riders. The most common ones are listed below:

Guaranteed Insurability Rider (Renewal)
This rider allows a policyholder to purchase additional coverage within a certain stipulated time-frame without having to prove insurability. This comes in handy in circumstances that call for you to have additional coverage such as when you get married, have a child or suffer from declining health. You can hike your premiums to cover the additional death benefits. Sometimes, a renewability rider offers an option to renew the policy at the end of your term period without having to go for medical check-ups.

Accident Rider
An accident rider will provide death benefits equal to the face value of your life insurance policy. If death is by accident (check for terms and conditions), the insurance company will pay the beneficiary double the death benefits. This is also called a Double Indemnity Rider because it doubles the benefits.

Waiver of Premium Rider
This rider protects your family if the policyholder fails to make payment on premium because of a permanent disability, an illness, or injury prior to a specified age. The policyholder is exempt from paying premiums until such time that he/she is in a position to make payment. This rider will save the policy from lapsing and can prove to be very useful. Make sure you understand the terms of the rider since conditions may vary from policy to policy.

Spouse Insurance Rider
This rider insures your spouse so that if either you or your spouse were to die, the surviving spouse can claim death benefits.

Family Income Benefit Rider
When the policyholder dies, this rider will ensure the family is provided with a monthly income. The number of years your family will receive this benefit is pre-determined in the contract.

Accelerated Death Benefit Rider
If the policyholder is diagnosed with a terminal illness that will significantly shorten a lifespan, then this rider provides a portion of the death benefits in advance to cover medical expenses. This may be between 25 to 40 percent of the death benefits. However, the life insurance company will subtract this amount from the coverage which means, if you die, your family will receive less coverage than what you had covered for.

Return of Premium Rider
Under this rider all premiums paid are returned to you, if you outlive the policy term. There are variations of this rider and each company may differ in the terms and conditions it offers.

Free Life Insurance Quotes
You can see why choosing a rider is a choice based on your personal needs and requirements. Many life insurance companies offer free riders to gain a competitive edge over other companies. The best way to find a good deal is to shop around for life insurance online. Look for BBB-accredited online insurance providers who are affiliated to a number of top-rated life insurance carriers. Simply fill in their questionnaire and you'll receive the best term life insurance quotes suited to your particular life insurance needs.
Continue reading..