Disability insurance riders are a way that you can better customize your policy to fit your needs. In this article, we will go over the most common disability insurance riders and what benefits they offer.
No Cost/Default Riders
There are some disability insurance riders that come with your policy as a default or you can choose to add them on without increasing your premium. You will find a list and explanation of these riders below.
This rider states that if your premiums are paid the insurance company cannot cancel your policy. Most policies have this automatically built-in.
Waiver of Premium
A waiver of premium rider is self-explanatory. If you become unable to work and file a claim, you will not need to pay your premiums. Then once you recover you will resume your payments.
Automatic Benefit Increase
This rider will provide you with an increase in your monthly benefit for the first 4-5 years of the policy. This helps the value of your policy to keep up with the rising cost of living. However, many choose to decline to take this increase each year since accepting it will cause an increase in premiums.
Presumptive Total Disability
With a presumptive total disability rider, the full benefit of your policy will be paid out immediately, which means with no elimination period. This would occur only under certain circumstances. This would include loss of hearing, speech, sight in both eyes, or the use of at least two limbs.
Family Care Benefit
Some insurance companies will allow you to add a rider that will pay you a policy benefit if you must take time off of work to care for a relative.
A death benefit rider will pay money to your beneficiary if you were to pass away while you were receiving your disability benefit.
Riders with Premium Increases
There are riders you can add to your disability insurance policy that will cause an increase in your premium. These riders can be worth the premium increase depending on your situation. You should consider their benefits carefully to see if they are worth the cost.
This type of rider changes how qualifying to receive your benefit will work. Typically, the insurance company will only payout if you are unable to perform any occupation. But if you add on your own occupation rider you can qualify to receive benefits if you are specifically unable to perform your own occupation. Having this rider will make it much easier to qualify to receive your benefit.
A non-cancellable rider will guarantee that your premium will not raise. It locks in a price so that the insurance company cannot surprise you. However, this rider will initially give you a higher premium than a policy without it.
This rider will allow you to receive a partial benefit if you are still able to work, but for a lower amount than before. This can help to ease the burden of a partial cut in income.
Future Purchase Option
A future purchase option rider allows you to purchase more insurance coverage later. This can be done without an additional underwriting process. The future purchase option rider can be helpful as it will allow you to increase your coverage as your income increases.
Choosing Which Disability Insurance Riders Are Right for You
Which disability insurance riders are right for you will depend on your circumstances. A qualified disability insurance agent can help you to find a policy and riders that will fit both your needs and your budget.
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