Advantages / Disadvantages of Life Insurance Riders
Posted in Life Insurance , Life Insurance Riders
September 18th, 2009
Life insurance means that our loved ones will get money from the life insurance provider should we suddenly die, and their source of income and financial security suddenly disappear along with you. With life insurance you get a basic policy, and on top of that you can add various riders to your policy which supplement and enhance the fundamental policy. There are advantages and disadvantages of life insurance riders.
Advantages of Life Insurance Riders
Some of the most common life insurance riders are accelerated death benefit, accidental death benefit, accidental death and dismemberment, disability income, guaranteed insurability, level term, and waiver of premium. There are other life insurance riders out there, of course, but these listed are probably the most common. The most common advantage to these riders is that they add another layer of financial protection and benefits not offered with a standard life insurance policy.
Disadvantages of Life Insurance Riders
Paying for these riders – in the form of a higher monthly premium – will protect you in specific circumstances. If you pay for any one of these riders, and the specific scenario which they address happens to materialize, you will breathe a huge sigh of relief should that happen. Your investment in the rider will have paid off, and you will be saved from a difficult predicament. On the other hand, these life insurance riders all do cost money, and life insurance brokers have an investment in trying to get you to buy them, because it means they make more money. So, you could get a “sell-job,” and end up paying for all kinds of very expensive riders when you really don’t need them.
To learn more about the advantages and disadvantages of life insurance riders, be sure to consult with a life insurance professional. Another good, objective source of information and advice would be a consumer advocacy group that specializes in insurance.
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