Life insurance riders in Florida are optional add ons that insureds add to their life insurance policies. Some riders allow insureds to access their death benefits while still alive. It typically covers life events that a basic life insurance policy does not cover and often comes with additional costs. There are many kinds of life insurance riders available in Florida, and they vary by insurer. Some of the most common riders are:
- Accidental death rider
- Guaranteed insurability rider
- Family income rider
- Waiver of premium rider
- Accelerated death benefit rider
- Long-term care (LTC) rider
- Return of premium rider
- Child term rider
Why Are Riders Important in Life Insurance?
Riders are important in life insurance because they help you enhance your coverage by allowing you to tailor your insurance policy to meet your specific needs and access benefits that your basic life policy doesn’t offer. You can add riders to a life insurance policy at any time, during purchase or post-purchase. Riders also help you save costs because they are cheaper than buying individual insurance policies to cover specific insurance needs. For instance, adding a $10,000 child rider to your term life policy can cost $4 to $4.20 per month, while a stand-alone child life insurance policy might cost $40 to $50 per month.
There are different types of riders available in Florida, and each rider offers specific benefits. Hence, before purchasing a rider, ensure you consult with a Florida-licensed life insurance agent. They can recommend good riders that will meet your unique needs.
What Are The Top 8 Most Important Life Insurance Riders in Florida?
The top 8 most important life insurance riders in Florida are:
- Accidental Death Rider: This rider is also called a double indemnity rider. If an insured with an accidental death rider dies during an accident, an additional amount of death benefit will be paid out to policy beneficiaries. The additional amount is usually equivalent to the death benefit of the policy, which makes the policy beneficiaries get twice the amount of the policy. This type of rider is good for individuals who are the sole providers of their families because the double benefits will take care of the needs of their loved ones.
- Guaranteed Insurability Rider: Purchasing this rider with your life insurance policy allows you to have extra insurance coverage without the need for further medical examination, even if your health declines with age. You would not also need to do medical checkups when you have to renew your policy after it expires. A guaranteed insurability rider is good for individuals with medical histories.
- Family Income Rider: This rider provides a regular monthly payment of income to insureds' family members at their demise. This amount is usually equivalent to the insured's monthly income. At the point of purchase, insureds must state the number of years their families will receive the benefits. This type of rider is beneficial to individuals who are the breadwinners of their families.
- Waiver of Premium Rider: This rider allows your insurer to waive all future premiums if the insured loses their income source due to an injury or illness or becomes permanently disabled before a specified age. This waiver is usually in force until the insured can work again. The waiver of premium rider is good for individuals who are the sole breadwinners of their homes.
- Accelerated Death Benefit Rider: Insureds with terminal illnesses that will shorten their lifespan can get this rider so they can have access to their death benefits while still alive. The amount received by the insured would be subtracted from the death benefit the insurer will pay to the policy beneficiaries at the demise of the insured. Many insureds who choose this type of rider have less than two years to live and use the money for medical expenses, drugs, and other expenses. Accelerated death benefit rider is good for individuals with chronic diseases, terminal illnesses, or individuals who need long-term care.
- Long-Term Care (LTC) Rider: With this rider, insureds can receive a portion of their death benefits monthly to pay for long-term care costs. LTC is beneficial for individuals with stroke, rheumatoid arthritis, Parkinson's disease, cancer, and Alzheimer's disease who have to stay at a nursing home or receive home care. To be eligible for an LTC rider, a medical professional will have to attest that the insured is:
- Unable to engage in a minimum of two activities of daily living; or
- Is cognitively impaired and would need a lot of supervision to protect their health and safety
- Return of Premium Rider: Insureds who have this rider and outlive their life insurance policies are reimbursed all or some of their paid premiums over the years. However, full premiums are paid to policy beneficiaries if the insured dies during the policy term. A return of premium rider is good for anyone, especially those in good health and those who have the tendency to outlive their policy.
- Child Term Rider: This rider is a term plan which parents can add to their life insurance policies for their children. They can convert it to permanent insurance without medical examination when their children mature, which is often by age 25 but may vary by insurer. However, if their children die before the specified age, a death benefit will be paid to them (parents). Child term rider is good for married individuals with children and single parents with children. Generally, individuals who have dependents should consider getting this rider.
Riders are most-commonly associated with Permanent (Cash value) life insurance. Use the life insurance policy comparison worksheet to track the must-have riders for you Florida life insurance.
Other Life Insurance Topics of Interest: