What are policy riders? In this article I am going to share a true story that is near to my heart. About one of the best men that I have had the privilege to meet and work with. I am going to explain what a policy rider is, and how it can help you!
Expense Mutual is an online life insurance agency that gives free online life insurance quotes.
When I first got his life insurance industry, I sat down with one of my mentors who was a lawyer. For brief period of I wanted to be a lawyer. It’s funny to look back on the twists and turns of life and see how far away I got from the law path. But when I was just out of school I was interning for him at his law firm. Then when I decided to go into the life insurance industry, he was one of the people that I wanted to sit down with and talk with about the necessities of a life insurance policy.
We met at his office and I actually gave a small talk to his entire office about life insurance. As you can imagine busy lawyers were not to interested in hearing about term polices, perm polices, and riders on the policy. They politely listened and thanked me for my time. No one in the office took out a policy including my mentor. When we sat down and I told him about my recommendations. I recommended a sizable term policy and a small perm policy. The term policy had a several riders, including the Chronicle Critical and Terminal Illness rider. This rider lets the policy owner use the death benefit to pay for medical treatment in the event of chronicle or terminal illness diagnosis.
Just like the rest of his law office, he was fairly young in his late 40’s with seven children. My mentor said that he was excited for me and my carrier choice. He even made a joke about me not joining the dark side of the force as a lawyer but didn’t see the need for a life insurance policy right now, but maybe when he got closer to retirement. Unfortunately, that day never came.
Two years later he was diagnosed with terminal brain cancer and given 6 months to live. My mentor who I had to literally look up to, because he was almost seven feet tall and over 200 pounds, was reduced to 135 lbs. and wheelchair bound for the rest of his days. What his health insurance didn’t cover he used all his savings, sold his house, and cashed in all of his 401Ks and IRAs to pay for treatments desperately trying to stay alive. The last time I saw him, he was sitting in a small garden his brother had built for him in his back yard so he could have somewhere to peaceful to sit outside.
I think about my mentor every time I write a policy. I know that getting people Life Insurance helps people. It is my duty to sell Life Insurance to as many people as possible. That is why I set up this Life Insurance Agency, so I can tell more people the benefits of Life Insurance. In the end my mentor had one last lesson for me to learn.
For more information on funeral cost check out our article How much does a funeral cost in the USA
What is a policy rider?
A policy rider is an addition to a life insurance policy. Some are free others you have to pay additional premium for. They give extras to your policy.
Types of policy riders
- Chronic of terminal illness rider
- Accelerated death benefit rider
- Waiver of Premium rider
- Child and Grandchild rider
The type of riders vary by carrier. The Chronic of terminal illness rider allows you to use part of the money in of your life insurance policy to pay for medical treatment. For example, if you are diagnosed with cancer then and given a chronic of terminal diagnosis and you have a $30,000.00 policy then you can use that $30,000.00 to pay for treatment. Carries also have limits to this. So, for example Foresters will allow you to use 75% of the face amount. Each carrier has their own rules about how much you can use. If my mentor had this rider then he could have used it for the experimental treatment to extend his life.
The Accidental death rider is if you are killed in an accident. For example, if you have a $25,000.00 policy and you are killed an accident, then you could get double your face amount. So, you would get paid $50,000.00 instead of $25,000.00 but this rider for some carriers cost more in premium. For example it cost $1-$4 dollars extra. So, instead of $25 a month it would be $26 to $29 a month. This would help get double the amount of money in the event of your accidental death for pennies on the dollar.
Waiver of premium rider is if you are injured, then you will not have to pay premium for the time that you are injured. This would be helpful for people who are still working. Most Americans only retire when they get sick or are unable to complete the physical requirements of their job.
The Child and Grandchild rider allows you to get $5,000.00 in coverage for each child or grandchild. You can add up to 12 Children or grandchildren! For $1.00 a month! So if you have a $35.00 a month premium and you add the Child and Grandchild rider then you will pay $36.00 a month. And you child or grandchild will have $5,000.00 of coverage for themselves. This is a great way to leave a legacy.
- My true story of my mentor is a cautionary tale
- Don’t put off for tomorrow act today!
- Each carrier has it’s own rules when it applies to riders
- Some you don’t have to pay for
What do riders depend on
- Policy type
- Insurance Carrier
Today is the day to take action! We are not guaranteed tomorrow. Contact our Agency for a free quote that will benefit you and you family toady and when tomorrow eventually comes. Act now!