Don’t Pass Over Life Insurance Riders

The new year is always a good time for your clients to assess financial strategy going forward.

I often take this opportunity to urge clients to look beyond the basics of their insurance protection plans and ask them to pay close attention to the policy add-ons offered by insurers and whether they have any critical ones in place.

In the industry, these add-ons are known as riders. Riders can give policyholders additional benefits and increase peace of mind. They know that, if something goes wrong, there’s another option that will help them maximize their insurance protection.

Riders do vary in price, but there are a few that are always worth the look.

  • Waiver of premium: This means the company pays the life insurance premium should the policyholder ever become totally disabled (as described in the rider). If a client overlooks this one, becomes disabled and is no longer able to work, how would he afford his premiums? It just makes sense.
  • Guaranteed insurability rider: If the policyholder is eligible for this rider, it makes sense to consider it. The GIR allows the life insurance policy holder to purchase additional coverage on specified election dates without providing evidence of insurability. We never know what life holds for our health many years down the road. If there is a time when your client needs more coverage, make sure he opts into this rider before future health issues preclude him from taking it.
  • Term conversion rider: This rider allows policy holders to convert their term life insurance into permanent life insurance without a medical exam. This is attractive for many people, but it can be especially attractive for a young person starting his career and family. A person in this position may need coverage, but not yet have the income to secure permanent insurance. This option allows them to convert when their need for permanent insurance makes sense and without additional underwriting.

The decision to buy life insurance is an important one. That’s why it’s critical to make sure your clients craft their life insurance protection plans with additional options that will best benefit their families.

By Matthew J. Dobbie for  Matt is president and CEO of uFinancial Group in Camp Hill, Pa.


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