LIFE & Health UNIT 5 Life insurance riders

disability riders (4)

*Waiver of premium *payor rider(waiver of payors premium) *disability income rider *waiver of cost of insurance (universal life)

Insured Term Rider

- Added to a permanent policy - Premium lower than if bought as separate policy -in the event of death term insurance and underlying insurance both pay the death benefit - Rider is for limited time -expires at certain age or year 3 types: -level -decreasing -increasing

accelerated benefits rider

- Advances part of the death benefit proceeds while insured is still alive - Death expected within 24 months - Permanent confinement in a nursing home due to chronic illness or catastrophic injury - Reduces death benefit payable to beneficiary upon death of the insured 25-100% of death benefit - Disclosure by company of affect on death benefits and other benefits (Medicaid, etc.)

Accidental Death Benefit Rider

- Death due to accident - Death must occur within 90 days of accident - Doubles or triples the face amount of policy

accidental death and dismemberment rider

- extra benefit if insured lived after suffering a severe dismemberment (feet, arms ,legs, sight, hearing , paralyses) - die you get full payout (principal sum) -one limb 50% payout -2 limbs 100% payout

Cost of Living Rider

- extra coverage to keep up with inflation -premium based on attained age -without proof of insurability -based on consumer price index -if CPI decreases insureds coverage is not reduced -CPI increases so does death benefit

Return of Premium Rider

- increasing term insurance rider - amount of rider equal to all premiums paid - death must occur while rider is in force

Long term care rider

-Advance of death benefits while insured is living -Percentage of face amount each month -May pay for home care, assisted living, and nursing home care -reduces death benefit payable upon death

Disability Income Rider

-Pays a monthly income benefit to the insured in the event he or she becomes disabled -Pays benefits for life or until a disability ends once a waiting period has passed from the date of the insured's disability -waives premiums

Payor Benefit Rider

-Pays the premium on a child's policy if the policy owner(adult) becomes disabled or dies. until age 18-21 -requires evidence of insurability

Exchange Privilege Rider

-This rider permits a policyowner to change the insured to a different person. -typically used when a business switches the insured to another employee if key employee retires or leaves. -plan will adjust by the new persons age

Gaurenteed Insurability Rider

-attached to permanent life insurance policy -allows one to purchase additional life insurance up to a specified amount -option to exercise usually available between age 25-40 -life events (marriage, birth, adoption of a child) allow you to advance to the next option date and purchase additional insurance -no medical questions asked -cost based on insureds attained age

Waver of premium rider

-insured and person are the same ppl -waves the premiums on the policy as long as insured is disabled -insured will still have to pay premium during 90-180 day waiting period -company pays premiums after - premiums paid during waiting period are reimbursed -insured resumes payment when the disability ends

Riders Affecting the Death Benefit Amount

-insured term rider -return of premium rider -accidental death rider -accidental death or dismemberment rider -guaranteed insurability rider -cost of living rider

Waiver of Cost of Insurance

Life insurance rider that allows a universal life policyowner who becomes disabled to -waive the cost of insurance deductions (cash account deductions) -does not waive the cost of premium required to build cash value.

life insurance riders

benefit options to tailor a policy to the owners needs

Other Insured Term Riders

provide convertible term insurance for someone of the primary insured(spouse children family) -spouse -children -family -exchange of insured