Common Life Insurance Policy Riders Flashcards
Waiver of preimum
Future premiums are waived if the insured becomes permanently disabled as a result of injury prior to a specified age. The disability waiver may have an elimination period before premiums are waived, such as 90 days.
Guaranteed insurability
You can purchase additional coverage in the stated period without the need for further medical examination. This option is of structured such as: every 3 years from age 21 to 40 (or another interval)
Accidental death
Pays out an additional amount if the insured dies as the result of an accident. Normally this is equal to the face amount of the original policy (so it doubles the benefit), so it is sometimes referred to as the “double indemnity” rider. It may offer the rider in higher multiples, though.
Family income benefit
Pays a monthly income to the beneficiary in addition to the policy face amount for a stated period of time to help with expenses in a transition period after the death of the insured.
Child term
Provides a death benefit in case a child dies before a specified age. After the child reaches maturity, the plan can be converted into permanent insurance, often up to a multiple of the rider amount, perhaps 4-5x, without the need for medical underwriting. These riders typically insure all children of the insured parent at one premium cost.
Spouse term
Allows the spouse of the base policy insured to have a term life insurance rider under a permanent policy insuring their spouse.
LTC
Allows a portion of the policy death benefit to be paid while the insured is alive and is in need of LTC services
Terminal illness
Allows a portion of the policy death benefit to be paid while the insured is still alive if the insured has been diagnosed with a terminal illness
Return of premium
Refunds the premiums paid over a specified term if the insured is alive at the end of the period or refunds the premiums paid to the beneficiary at the death of the insured. The insured pays an additional premium for this rider.
