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Life insurance extras that could pay off

Amy Higgins

Any life insurance policy will be a godsend for your family after you’re gone. But once you’ve established the basic safety net, your agent might ask whether you want extra coverage in the form of riders. Riders can beef up your benefits and might even help take care of you before you die. Here are some life insurance extras that will likely raise your premium — but that could be worth it.

Disability income

A disability rider will pay a portion of your income or a monthly benefit if you become unable to work because of an injury or illness. A rider offered by The Hartford, for example, targets its disability rider at small business owners, who can add the rider to their permanent life insurance policies.

If the insured person becomes unable to work (which can be devastating for a small business), the coverage starts kicks in — up to $5,000 a month for up to two years. Such a rider costs between 6 percent and 10 percent of the full life insurance premium, according to The Hartford’s website.

Critical illness

Life insurance policies with critical illness riders pay out when the policyholder is diagnosed with a critical illness. This rider generally pays a lump sum upon the first diagnosis after a specified waiting period. Insurance providers like Farmers Insurance and ING allow policyholders to spend the money however they choose. However, the death benefit will be reduced by the amount of the critical illness payout, according to ING.

This type of rider pays off only if you’re diagnosed with an illness that’s specifically listed in your policy. ING, for example, covers cancer, heart attack, coronary artery bypass graft, stroke, kidney failure, major organ transplant, brain tumor, paralysis, coma and blindness.


A return-of-premium rider enhances a term life insurance policy. With a traditional term policy, you pay premiums and never see that money again. But with this type of rider, you get back what you paid in premiums if you’re still alive when your coverage term ends.

American General Life Insurance’s return-of-premium rider allows the policyholder to make a choice when the term is up — extend coverage, or surrender the policy in exchange for a cash return equal to the premiums paid in over the years. The downside to this kind of rider is that your premium payments will be significantly higher than they would be for a basic term policy.

Accelerated benefits

A life insurance policy with an accelerated benefits rider can be a valuable asset if you need financial assistance while you’re still alive — in fact, this type of rider often is called a “living benefits” rider. Many life insurance companies roll it into the cost of your regular policy, according to the Alabama Department of Insurance.

Accelerated benefits kick in if you become terminally ill. Usually, that means your death is imminent and will likely happen within six months to a year, according to the Alabama Department of Insurance. Other covered circumstances might include permanent residence in a nursing home or the inability to perform basic activities like bathing or eating.

According to the Alabama Department of Insurance, insurance companies generally will pay out anywhere from 25 percent to 100 percent of the death benefit to policyholders who have this rider. However, these early payouts will be deducted from the death benefit that your beneficiaries will get.


Joint life insurance policies allow two lives under a single policy. Often, the same two-for-one goal can be accomplished by adding another person to a regular life insurance policy via a first-to-die rider. This rider will pay a death benefit to the survivor covered on the policy after the first insured person dies.

This option is available to spouses, business partners or other groups that rely on one another for support. For example, if two business partners are insured, a first-to-die rider would allow the surviving partner with the cash needed to continue operations and struggle through a difficult transition.

Waiver of premium

A waiver-of-premium rider allows you to stop making premium payments if you become totally disabled for a certain time period. For instance, ING’s waiver-of-premium rider allows policyholders to continue life insurance coverage without paying the premium if they’re totally disabled for four consecutive months. Insurance providers differ in how they define disability, so ask your provider to go over the policy specifics if you want to attach this rider to your policy.

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