Life Insurance Riders

Waiver of Premium Rider

A common Rider that will pay the premiums if the policyholder becomes disabled so the policyholder can continue to have coverage for the duration of the policy

25-100%

Accelerated death benefit payments range from _____ - _____% of the death benefit

Return of Premium Rider

An increasing term rider; the death benefit always equals the total of premiums paid for the rider and the underlying permanent policy

Double or triple indemnity, because the death benefit is twice or three times the face amount of the policy

What is another name for the accidental death benefit rider?

90

For the extra benefit to be payable with an accidental death benefit rider, the insured must die within _____ days of an accident

The rider does not return the actual premiums but pays an additional term insurance death benefit that equals the amount of premiums paid

How does return of premium rider work?

Term Insurance Rider

The insured can add term insurance to a permanent insurance policy. It provides coverage similar to a term insurance policy, however the premium is lower.

Accelerated death benefits play rider

This is a standard coverage added to a life insurance policy that enables the policy owner to apply for an advance on the death benefit proceeds during the lifetime of the insured

Cost of Living Rider

This rider is based on the consumer price index and as inflation increases, so does the death benefit for the policy

Payor Benefit Rider

This rider is usually found with juvenile policies and states that if the person responsible for the premiums, for example, the child's parents, becomes disabled or dies before the child legally becomes an adult, the rest of the premiums are waived until the child reaches a stated age, usually 18 or 21

Guaranteed Insurability Rider (also called guaranteed insurability option or a guaranteed insurability benefit)

This rider may be attached to a permanent life insurance policy and allows the owner to purchase additional life insurance at specified intervals in the future, for certain amounts, without having to provide evidence of insurability

Long-term Care Rider

This rider may be used to pay for qualified services, such as homecare, assisted, living, or nursing home care

Accidental Death Benefit Rider

This rider pays an extra benefit if the insured dies as a result of an accident

Accidental Death and Dismemberment Rider

This rider pays an extra benefit if the insured dies as the result of an accident and also pays an extra benefit if the insured lives after suffering a severe dismemberment

Other (Additional) Insured Rider

This rider provides convertible term insurance for a spouse or an immediate family member of the primary insured

Disability Income Rider

This rider provides the insured with a monthly benefit check if they become disabled

Waiver of monthly deductions rider or waiver of cost of insurance

This waiver suspends the monthly cost of insurance deductions that are made from the cash account instead of waiving the premium payment

Riders

What are benefits that are added to a life insurance policy to customize coverage to fit the insured's needs called?

The new insured is required to provide proof of insurability and premiums are adjusted based on the new insured's age and other rating factors

What is required from the new key employee for an exchange privilege rider?

The insured must have a limited life expectancy, or meet certain medical circumstances

What is required to qualify for an accelerated death benefit rider?

The benefit amount is typically based on the life insurance policy death benefit and an industry standard is 1% of the face value. The length of time the income payments will continue depends on the definition of disability in the policy.

What is the benefit amount with a disability income rider?

Principal sum - If a policyholder dies as a direct result of an accident, full death benefit will be paid out to the policies beneficiary Capital sum - The policyholder does not die as a result of the accident, and instead loses a limb, he/she will receive a 50% benefit payout Losing two or more limbs would compound for a full benefit payment

What is the payout for an accidental death and dismemberment rider?

Severance of legs, arms, feet or hands Loss of sight Loss of hearing Paralysis

What qualifies as dismemberment?

Options to purchase may be exercised typically between ages 25 and 40 at three-year intervals

When can the additional life insurance be purchased with a guaranteed insurability rider?

Exchange Privilege Rider or substitute insured rider

This writer is used to change the insured to a different person. This writer typically used when a business on the policy and it's also the beneficiary in the insured is a key employee. The writer switch is the insured to another employee if the key employee retires are these the company

The waiver of premium rider is available during the insured's working years and expires between ages of 60 and 65 (if an insured becomes permanently disabled before the age premiums will continue to be waived for life)

What are some limitations to the waiver of premium rider?

Terminal illness, with the death expected within 24 months Serious illness, such as cancer, which would result in a reduced life expectancy Long-term care due to the inability to perform a number of activities of daily living Being admitted to hospice or permanent confinement in a nursing home Catastrophic illness requiring extraordinary treatment, such as an organ transplant

What are some of the medical circumstances that make you eligible for the accelerated death benefit rider?

Disability waiver for flexible premium policies has a 3 to 6 month waiting period and expires between the ages of 60 and 65

What are the limitations to a waiver of cost of insurance?

Level Decreasing Increasing

What are the three term insurance riders that are available?

The waiting period is usually 90 to 180 days. If the insured is still disabled at the end of the waiting period, the company retroactively refunds any premiums paid during the waiting period

What is a typical waiting period for a waiver of premium rider?