Policy Riders

Insurance riders are additional provisions or features that can be added to an insurance policy to modify or enhance its coverage. Riders offer policyholders the opportunity to customize their insurance plans based on their specific needs. Here are a few common types of insurance riders:

• Children Insurance Benefit Rider: A child rider in life insurance is an additional benefit that can be added to a parent’s life insurance policy. It provides coverage for the insured’s children, offering financial protection in case of the child’s illness, injury, or death. This rider typically covers medical expenses and funeral costs for the child.

• Waiver of Premium Rider: This rider waives future premium payments if the policyholder becomes disabled or unable to work due to injury or illness. It ensures that the insurance coverage remains in force even if the policyholder cannot afford the premiums.

• Accelerated Death Benefit Rider: This rider allows the policyholder to receive a portion of the death benefit before passing away if they are diagnosed with a terminal illness. It can help cover medical expenses or other financial obligations during the policyholder's lifetime.

• Guaranteed Insurability Rider: This rider enables the policyholder to purchase additional coverage at specific intervals without undergoing additional underwriting or providing evidence of insurability. It allows for increased coverage as life events occur, such as marriage, childbirth, or home purchase.

• Return of Premium Rider: With this rider, if the policyholder survives the policy term, a portion or all of the premiums paid are returned at the end of the term. It provides a refund of premiums, making it a potential investment-like option for those seeking to recoup their premiums.

• Long-Term Care Rider: This rider provides coverage for long-term care expenses, such as nursing home care or in-home care, in the event the policyholder requires assistance with activities of daily living. It adds a long-term care component to a life insurance policy.

These are just a few examples of insurance riders available across various types of insurance policies, including life insurance, health insurance, and disability insurance.  The availability and specific details of riders may vary among insurance companies and policy types, so it's important to carefully review and understand the terms and conditions of any rider before adding it to an insurance policy.

Options

Non-forfeiture Option

Non-forfeiture options are features in life insurance policies that provide policyholders with choices if they decide to stop paying premiums before the policy reaches its maturity or if the policy lapses due to non-payment. These options allow policyholders to retain some value from their policy rather than losing it entirely. There are typically three common nonforfeiture options: 

• Cash Surrender Value: This option allows the policyholder to surrender the policy and receive the cash value that has accumulated within the policy, minus any applicable fees or charges. 

• Reduced Paid-Up Insurance: With this option, the policyholder stops paying premiums and converts the policy into a paid-up policy for a reduced death benefit. The policy will remain in force, but the coverage amount will be lower. 

• Extended Term Insurance: Under this option, the cash value of the policy is used to purchase term insurance for the same face amount as the original policy. 

The coverage continues for a specific period without the need for additional premium payments. These options provide flexibility to policyholders, allowing them to make choices that align with their changing financial circumstances while preserving some benefits from the policy.

Dividend Options

Dividend options are choices offered to policyholders by participating life insurance companies regarding how they want to receive the dividends generated by their insurance policies. Participating policies allow policyholders to share in the company’s profits, and dividends can be paid out in several ways. Common dividend options include: 

• Cash Payment: Policyholders can choose to receive the dividends in cash, providing them with immediate access to the profits earned by the insurance company. 

• Premium Reduction: Dividends can be used to reduce future premium payments. This option lowers the out-of-pocket cost for the policyholder while keeping the coverage intact. 

• Paid-Up Additions: Dividends can be used to purchase additional paid-up insurance coverage. This option increases the death benefit and cash value of the policy without requiring additional premiums. 

• Accumulation at Interest: Dividends can be left with the insurance company to accumulate interest. The policyholder can withdraw the accumulated dividends or use them to purchase additional coverage at a later date. 

• Term Insurance Purchase: Dividends can be used to buy additional term insurance, enhancing the policyholder’s overall coverage. 

• One-Year Term Option: Dividends can be used to purchase one-year term insurance, providing the policyholder with temporary additional coverage for a specific period. 

Policyholders can choose the dividend option that best aligns with their financial goals and needs, allowing them to tailor their life insurance policy to their individual circumstances.