Life insurance is more than just planning for the worst case scenarios. In fact, it serves as a safety net in your financial plan, and adds an additional layer of security to protect you and your family against unexpected events. Beyond this fundamental protection, life insurance offers a number of other benefits that contribute to overall financial security, and you can maximize those benefits by going with certain life insurance riders.
Taking Advantage of Life Insurance Riders
A rider is essentially an additional clause incorporated into your basic insurance plan. It is designed to modify or enhance your coverage to yield more specific benefits. While these riders come with an added cost, as you pay money on top of your regular premiums, they offer the financial security you truly want for you and your dependents. Here are some of the most popular life insurance options or riders that enhance financial security in many ways. For instance:ย
Guaranteed Insurability Rider
The rider improves financial security since it allows policyholders to cover important life events without undergoing additional medical examinations. The rider comes in handy as your health deteriorates over time, but you still get sufficient coverage to manage your condition.
Cost of Living Rider
This life insurance rider increases financial security by changing your basic coverage as per the prevailing inflation rate. It means your death benefit goes up if the cost of living increases with time. This ensures that your beneficiaries get more money to maintain their purchasing power irrespective of how the economy behaves.
The rider correlated directly with the Consumer Price Index, making sure your policy grows as per the prices of goods and services. However, some policies may also be designed to increase by a fixed rate, so be sure to confirm before signing the dotted line.
Family Income Benefit Rider
In case you are concerned about the financial security of your family and want them to have a steady flow of income even when you are not around, this rider will help. The family income benefit rider prevents your family from losing all the funds upon your death. It continues to offer a set amount of money to ensure your dependents can maintain their lifestyle and pay recurring expenses without a hitch.
LTC Rider
Considering that the costs of long-term care can exceed $65,000 annually, itโs vital to opt for the LTC rider. About 900,000 people turning 65 may require nursing home care each year. An LTC rider is a targeted type of care dedicated to individuals struggling with chronic diseases, cognitive impairments, or debilitating medical conditions. This rider addresses personal and daily needs, like eating, dressing, and bathing.ย
Those with Alzheimerโs and other disabling conditions may also receive intensive nursing help under this plan. LTC may also offer custodial care services, homemaker services, assisted living, and adult day care programs.
Endnote
Riders in life insurance offer overall protection from various risks, including a change in your living standards, inflation, lost income, and long-term care. These riders allow you to add whatever you deem necessary to design coverage that meets your changing needs for financial security.