William Penn Life, 2004 (39. évfolyam, 1-12. szám)
2004-07-01 / 7. szám
Riders on the form A primer on the extra benefits available to those purchasing life insurance from the NY Department of Insurance WHEN CONSIDERING THE purchase of a life insurance policy, it's natural and fitting that most of your attention is focused on buying the right amount of coverage to meet your and your survivors' needs. But, sometimes overlooked are the supplemental benefits that may be available to you. These supplement benefits, known as "riders," cover situations which may affect your ability to pay your premiums on the policy you're considering or may provide additional benefits you may desire. Usually the addition of a rider is reflected in an additional charge by the company and may require that you provide evidence of insurability. Some of the more important riders to consider are: Waiver of Premium provides that your policy will be kept in force by the company, without further payment of premiums, if you become totally disabled before age 60 or 65, after an initial waiting period. Total disability will be defined by the terms of the rider. Premiums are waived as long as your disability continues and policy benefits including cash values and dividends (where payable) continue just as if you had paid the premiums. This coverage is really a disability benefit and is both worthwhile and inexpensive. Accidental Death Benefit. This provision provides an additional amount of insurance in the event that death of the insured occurs by accident. Some accidental death benefits will provide for two or three times the face amount of the policy for specified types of accidents. The accidental death must occur prior to a specified age, such as 65. Among other exclusions, death due to sickness is excluded Payor Benefit Rider, also known as Payor Waiver of Premium, may be added to the policy of a juvenile stating that if the payor (the one paying the premium) dies or becomes totally disabled prior to the juvenile's reaching majority, the subsequent premiums due are automatically waived. Term Riders provide temporary coverage which may be attached to an existing permanent policy or interest sensitive policy to provide an amount of extra insurance protection for a fixed period of time. These types of riders are useful if you need more insurance or a decreasing amount of coverage for a limited period. Automatic Premium Loan Provision. This provision provides that at the end of the grace period, if the premium due has not been paid, a policy loan will automatically be made from the policy's cash value to pay the premium. This helps to prevent an unintentional lapse in the policy. This provision is often recommended because of the numerous circumstances when a premium payment may have inadvertently gone unpaid. The value of the cash surrender must at least equal the loan amount plus a year of interest. This provision must be elected by the policyowner and can be cancelled at any time by the policyowner. Disability Income provides a monthly income while you are totally disabled after an initial waiting period. The monthly disability income benefit is limited to a percentage of the death benefit. Spouse Rider. This type of rider will provide level term coverage on the life of the insured's spouse. Such rider will also provide a conversion provision permitting the spouse to convert to permanent coverage without evidence of insurability prior to the termination of the rider or upon the death of the insured under the basic policy. Children’s Rider. This type of rider will generally provide level term coverage on the life of your children. Such riders are usually offered at one premium rate and may cover newborns and adopted children who can be added to the coverage without increasing the premium you pay. The rider will also provide a conversion provision, which will permit each child to convert to a permanent plan of coverage without evidence of insurability prior to the termination of the rider or upon the death of the insured under the basic policy. These are just some of the supplemental benefits you may be able to attach to your life insurance policy. Your insurance agent can explain to you which riders are available for the policy you are considering and provide you more information on the benefits and costs of such riders. Money Links For more information about riders, talk to your WPA sales representative. You can also learn more about riders by contacting the consumer affairs office at your state’s department of insurance. 4 ffilliu Pen Life, July 2004
