Life insurance riders: 13 key policy provisions & options to know

Riders are optional benefits you can tack onto your life insurance policy. They allow you to customize and increase your coverage, but it's going to cost you.

When you buy a car, your purchase experience isn’t over when you decide which car to buy. You typically have a number of options to choose from to make the car better, such as a satellite radio, a sunroof, heated seats, or an extended warranty. Some options may sound good, others not so much. You may also decide the base model is adequate for your needs.

The same scenario occurs when you buy life insurance. Most insurers offer a menu of optional benefits to enhance your coverage. Depending on your individual scenario, you may be interested in all, some, or none of these options.

Insure loved ones by adding a rider to your policy

Most life insurance policies include optional riders that cover the life of another person.

Additional insured rider

An additional insured rider is typically used to insure a spouse of the base policy insured. It is also useful in many situations when coverage is desired on an additional person, such as a business partner, without having to purchase a separate policy. Typically, the second insured individual is required to complete the underwriting process. The rider is subject to a minimum coverage amount based on the primary insured’s underwriting status.

Child term rider

A child term rider covers the life of any children of the main policy insured. Most people forgo separate life insurance coverage on children, since a child’s death is so unlikely and in the event a tragedy occurs, the financial loss is minimal. Still, it’s not a bad idea to have a small amount of coverage, via a rider on your policy, that can pay for funeral expenses and cover your lost income.

Riders that help when you’re seriously ill or hurt

Life insurance policies offer a number of “living benefits” designed to help the insured and their beneficiaries in the event of a serious illness or disability. Examples of these riders include:

Disability income rider

A disability income rider will pay a monthly benefit to an insured person who suffers a disability that affects their ability to work and earn an income.

Whether you have access to a disability income rider or not, you should consider buying your own disability insurance policy. Personal disability policies will replace a higher percentage of your income for a longer period of time if you become unable to work.

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Waiver of premium rider

A waiver of premium rider enables the insured to keep their life insurance coverage intact without paying premiums if they suffer a disability that affects their ability to earn a living. Keep in mind this type of benefit does not provide income or benefit payments; it only waives your insurance premium obligation.

Accelerated benefit rider

An accelerated benefit rider lets you — or your beneficiaries — receive a portion of your contracted death benefit prior to your death if you are diagnosed with a terminal illness. This rider is sometimes referred to as a terminal illness rider. You can use the rider benefit for medical care, hospice care, or other needs.

Critical illness rider

A critical illness rider is similar to an accelerated benefit rider. The difference is that the rider benefit is paid in the event you are diagnosed with a chronic illness, not a terminal illness. Insurers have different definitions for chronic illnesses, but they typically include strokes, heart attacks, and cancer.

If you are unable to add this rider to your policy, you can always purchase your own critical illness insurance policy instead.

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Long-term care rider

A long-term care rider provides monthly payments if the insured becomes confined to a nursing home or other long-term care facility.

Learn More: How Does Long-Term Care Insurance Work?

Accidental death rider

An accidental death rider increases the policy’s contracted death benefit should you die as the result of an accident. In many cases, the benefit for accidental death is double what it would be for a non-accidental death. That’s why this rider is often referred to as a double indemnity benefit.

Accidental deaths are often unforeseen and therefore, the most disruptive to a family. Providing a larger death benefit can help your loved ones better cope with the sudden loss.

It’s important when buying this rider that you understand how the insurance company defines “accidental” death. If your death does not meet the insurer’s definition, you would only be eligible for the benefit offered on the base policy.

[ Related Read: Is AD&D Insurance Worth It? ]

Automatic premium loan rider

When added to a policy, an automation premium loan rider will pay your premium out of the policy’s cash value in the event you forget to pay or can’t pay that month’s premium. Therefore, it’s only available on permanent policies that have the potential to build cash value.

Guaranteed purchase option rider

A guaranteed purchase option rider enables you to purchase additional coverage at later dates. You can do so without filling out an application or going through underwriting. The coverage is available regardless of whether your health status has changed. The rider is sometimes referred to as a Guaranteed Insurability Rider.

Depending on the carrier, you may be able to increase your death benefit at certain intervals, such as every five years. Some enable you to add coverage when you reach specific ages. Another common trigger for this rider is a special life event such as the birth of a child.

Family income rider

A family income rider alters the method that the policy’s death benefit is distributed.

Most life insurance policies payout the death benefit in a single lump sum.

With a family income benefit rider, your beneficiaries can receive the policy’s death benefit as monthly income. Often, the rider benefit is set up so that the monthly benefit is equal to the insured’s monthly income.

This rider may also enable you to specify the amount of time you want your family to receive monthly income. Younger insureds will want that coverage period to last longer.

This rider is often selected by people who are the sole income earners in their households. It’s also useful in situations where survivors may not have the financial acumen to handle a large, lump-sum death benefit.

Return of premium rider

A return of premium rider is an example of a feature that some policies include at no extra cost, while others require an additional premium amount. The rider will refund the money you paid in premium if the policy expires before you pass away. For example, if you purchased a 20-year term policy and kept it the entire 20 years, the insurance company would refund the premiums you paid, without interest.

Term conversion rider

A term conversion rider enables you to convert an existing term life insurance policy into a permanent policy, such as whole life or universal life. This conversion occurs without having to undergo medical underwriting.

People often use this benefit if they could only afford term insurance initially, but want to be covered by a permanent policy later. It’s also useful if you have a term policy with a higher death benefit that you want to convert to a permanent final expense policy.

Life insurance rider considerations

Keep in mind that many of these options will add to the cost of your insurance. Therefore, it’s important to understand what each rider offers and how it may potentially benefit you.

Also, riders typically must be purchased at the same time as the base policy; you likely will not be able to add features after your policy is issued. You may, however, be able to drop a rider after your policy is issued. Take time to consider what options you need before signing on for coverage.

When comparing life insurance policies and the above features, keep in mind that some carriers will automatically include a feature into the policy, while others will charge an additional amount of premium for the same feature.


Jack Wolstenholm is the head of content at Breeze.

The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.