Most insurers offer a variety of riders — policy add-ons that can personalize your life insurance policy.
Updated Sep 6, 2024 · 5 min read Written by Ben Moore Assistant Assigning Editor Ben Moore
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Ben Moore is an assistant assigning editor and spokesperson who joined NerdWallet as a writer in 2020. An auto insurance authority, his past work has been featured in The Associated Press, The Chicago Sun-Times, MarketWatch, Nasdaq and Yahoo News. Ben has been quoted in Martha Stewart and Real Simple magazine, and he has appeared on local broadcast television. He is based in Nashville, Tennessee.
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Nerdy takeawaysLife insurance is a vital part of any financial plan, but what if a policy doesn’t meet all of your needs?
You can customize your coverage by adding life insurance riders to your base policy.
Life insurance riders are optional additions to a life insurance policy that provide supplemental coverage or benefits you wouldn’t receive otherwise. They can help you personalize your policy to fit your and your loved ones’ needs.
Some riders increase the cost of your life insurance premium , while others are included at no extra charge.
The life insurance riders available to you depend on your insurer and the policy you’ve chosen. In most cases, riders can be added to both term and permanent life insurance policies, but the details can vary. You’ll need to opt in to riders when you buy your policy — you generally can’t add them later.
Since riders are designed to help you personalize your policy, you might select life insurance riders that fill financial gaps — like providing funds to assist you in managing a chronic or terminal illness. Other life insurance riders allow you to add extra coverage for a spouse or child, or increase the payout if you die due to an accident.
An accelerated death benefit allows you to access part or all of the policy’s death benefit while you’re still alive if you have a terminal illness. While there are no restrictions on how the money can be used, this rider can be a helpful way to pay for medical care and treatments.
This rider is a type of life insurance living benefit — a policy feature that let you tap into your policy’s payout while you’re living.
This rider only covers specific situations, which can vary by insurer, so be sure to check with your provider. A qualified event could include:
Diagnosis of a terminal illness, confirmed by a doctor. An organ transplant. The need for continuous life support or long-term care. A permanent move to a nursing home.Many insurers include an accelerated death benefit rider at no additional cost, but may charge a fee for you to access the benefit. Any payouts from this rider will be subtracted from the policy’s total death benefit once you die. So, if you receive 100% of your policy coverage amount from an accelerated death benefit rider payout, your beneficiaries won’t receive a life insurance death benefit . If you have accrued a cash value on your policy, this may also be reduced.
Payments are usually tax-free, but there are exceptions. Payouts from an accelerated death benefit rider could also affect your ability to collect Medicaid or Social Security payments.
An accidental death rider increases the payout to your life insurance beneficiaries if you die from a covered accident, like drowning. It’s sometimes referred to as a “double indemnity” rider, because it can double the amount of money your beneficiaries receive. A stand-alone life insurance policy will cover accidental deaths — this rider simply provides a higher payout for beneficiaries in that case.
However, the death must occur within a set period of time after the accident, such as 90 days, for the extra benefit to pay out. This rider also comes with exclusions and won’t pay out under certain circumstances, such as death from:
Mental illness. Alcohol in combination with drugs or medications.An accidental death benefit rider typically comes at an extra cost. It can be added to a term or whole life policy without a medical exam up until you reach a certain age, around 65 years old. Payouts from an accidental death rider may decrease after you reach a certain age, usually around 70.
An accidental death rider is not to be confused with an accidental death benefit policy, a different type of stand-alone life insurance policy that pays out only after a death from a covered accident.
Did you know.Separate from an accidental death rider, accidental death and dismemberment insurance pays out if you die or are injured in an accident.
You can add a child term rider to cover your children on your policy instead of purchasing separate policies for them. These riders pay a small death benefit, often from $5,000 to $25,000, if a child dies before reaching the “age of maturity,” typically around 25 years old.
Biological children, stepchildren and legally adopted children can be added without the need for a medical exam. Plus, any children born or adopted after the rider is in place will also be covered.
The rider is tied to the legal guardian’s policy, so if that expires, so does the coverage for the child. You may be able to convert the rider into a permanent policy for your child once they reach the age of maturity, but some restrictions could apply.
A guaranteed insurability rider will allow you to buy more life insurance coverage in the future without the need for a medical exam or health questionnaire.
Typically, you can increase coverage every three to five years during “option periods” — windows of time when you can purchase additional coverage within a predetermined range. You may also be able to top-up your coverage at the time of major life events, like getting married or having a child. You can typically buy additional coverage until you’re 40 years old.
A long-term care rider allows you to access your life insurance death benefit while you’re still alive if you have a chronic illness and are unable to complete daily living tasks, like bathing, eating or dressing. The money you receive can be used to manage your day-to-day care.
There are generally two types of long-term care riders:
Reimbursement riders will pay you back for what you spend on long-term care expenses, up to your policy’s monthly limit.
Indemnity riders pay out a predetermined monthly benefit, regardless of the actual long-term care expenses you incur.
A long-term care rider differs from a stand-alone, long-term care insurance policy, which does not provide a death benefit to beneficiaries when you die. This type of coverage provides benefits when you’re alive. It can reimburse you for the costs of care you receive when you have a chronic condition, disability or disorder like Alzheimer’s disease.
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A return-of-premium rider refunds some or all of your premium payments if you outlive your term life insurance policy. It can be added to a new or existing term life policy.
A return-of-premium rider comes at a high price — it could more than triple the cost of your premium. And you typically won’t get a refund for any extra policy fees or other add-ons you paid.
Some insurers allow you to use all or half of the refund toward a new policy without needing another medical exam if you want to continue your coverage.
A waiver of premium rider pays your life insurance premiums if you become totally disabled and can’t work. Covered disabilities may include permanent illness or a severe injury, such as loss of sight.
You’ll likely need to provide statements from both the Social Security Administration and a physician as proof of your disability, as well as proof to your insurer every few years.
You may have a waiting period before this rider pays out, usually around six months. But if your claim is approved, you’ll be reimbursed for the premiums you paid during the waiting period. Your premium payments will be covered until you’re no longer disabled, or until you reach a certain age, typically from 65 to 70.
Typically, a waiver of premium rider can be added to a policy only at the start of coverage, and you cannot have a pre-existing disability at the time of purchase.
Not all insurance companies offer the same riders, so it’s important to shop around and ask which are available. Here are some additional riders you could come across:
Chronic illness riders let you access part of your death benefit while you’re still alive if you’re diagnosed with a condition that requires extensive medical care and assistance.
Cost-of-living riders gradually increase the policyholder’s coverage to align with inflation and the Consumer Price Index. Premiums will also increase.
Critical illness riders allow policyholders to receive money if they experience a critical illness, like a heart condition or stroke.
Disability income riders provide monthly payments if the policyholder is disabled and can’t work for a specific period of time. Payouts are typically a percentage of the total policy’s coverage amount.
Family income benefit riders provide monthly payments to the beneficiaries if the policyholder dies.Guaranteed renewability riders give you the option to renew your term policy without taking another medical exam.
Paid-up additions allow you to boost the cash value of a permanent life insurance policy by paying extra premiums early on.
Spousal insurance riders pay out if the policyholder’s spouse dies, but typically don’t offer as much protection as if the spouse had a separate policy. For example, if the policyholder dies or the marriage ends in divorce, then the spouse will lose coverage.
Term conversion riders allow you to convert a term life policy into a permanent one, typically without the need to complete a medical exam.
Term insurance riders offer additional coverage on a whole or universal life insurance policy for a fixed amount of time.
This is the typical availability of the more common riders. Some insurers may not offer these riders at all or may restrict them to one type of policy.
Term life insurance only
Permanent life insurance only
Term + permanent life insurance
Accelerated death benefit rider
Accidental death rider
Accidental death and dismemberment rider
Chronic illness rider
Cost of living adjustment rider
Critical illness rider
Family income rider
Guaranteed insurability rider
Guaranteed renewability rider
Long-term care rider
Paid-up additions rider
Term conversion rider
Term life insurance rider
Waiver of premium rider
Frequently asked questions What are life insurance riders?Life insurance riders offer additional coverage to customize your term life insurance policy or permanent life insurance policy. Riders can provide an increased death benefit, help pay for costs if you become terminally ill or even cover your children.
How much does a life insurance rider cost?Some riders, like an accelerated death benefit rider, may be added for free, while others may increase your premium.
Are life insurance riders worth it?If you need customized or additional coverage, life insurance riders can provide significant value — sometimes at no or little additional cost. When choosing riders, think about financial needs you might have in the future, like funds to manage a chronic illness or coverage for your spouse or child.
What are life insurance riders?Life insurance riders offer additional coverage to customize your term life insurance policy or
permanent life insurance
policy. Riders can provide an increased death benefit, help pay for costs if you become terminally ill or even cover your children.
How much does a life insurance rider cost?Some riders, like an accelerated death benefit rider, may be added for free, while others may increase your premium.
Are life insurance riders worth it?If you need customized or additional coverage, life insurance riders can provide significant value — sometimes at no or little additional cost. When choosing riders, think about financial needs you might have in the future, like funds to manage a chronic illness or coverage for your spouse or child.
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Ben Moore is an assistant assigning editor and spokesperson who joined NerdWallet as a writer in 2020. An auto insurance authority, his past work has been featured in The Associated Press, The Chicago Sun-Times, MarketWatch, Nasdaq and Yahoo News. Ben has been quoted in Martha Stewart and Real Simple magazine, and he has appeared on local broadcast television. He is based in Nashville, Tennessee. See full bio.
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Renée Deveney is a former NerdWallet writer covering life insurance. She is passionate about financial education and empowerment for all. See full bio.
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