The Basic Guide to Life Insurance Riders for New Parents: What You Need to Know

Searching for life insurance can sometimes seem like a confusing task. How much coverage should I get? What company should I choose? What even is a rider? As we live our busy lives, we don’t have time to research every aspect about a topic. With that in mind, this post is designed to help you understand what is a life insurance rider and what can it do.

What is a life insurance rider?

A life insurance rider, put simply, is an add-on. It is a modification to a life insurance policy that brings more benefits, or changes the terms of existing benefits. 

Does a life insurance rider cost more to add?

Every life insurance policy comes with riders already attached to the policy. The riders that are initially attached depends on the company, but adding extra riders can increase the overall premium of the policy.

How does this impact my policy and coverage?

This part is tricky to answer as every person’s and family’s need is different. However, there are some major ways that you can change your policy. 

Firstly, you can add a rider that gives you living benefits during the policy period. What does this mean? Living benefits in a policy allow you, the policy holder, access to the death benefit money without dying. An example of this is, let’s say you added a critical illness rider, and during the policy period you had a heart attack and survived. The critical illness rider would allow you to file a claim with the life insurance company. The company would then review your claim, and give you a payout based on your illness. This payout from the insurance company can be used for anything you want, it is very flexible. 

Another example is a child rider. Although, no parent ever wants to think about this possibility, the child rider can insure a child under the policy of a parent. If the child passes away, the parent would get $10,000 to $100,000, subject to the company’s terms. 

Choosing the Right Riders

It’s important to consider which riders best align with your family’s specific situation. Take the time to evaluate your current and future needs. Ask yourself questions like:

- Do you have existing health concerns that might necessitate living benefits?

- How many children do you plan to provide coverage for?

- What kinds of unexpected situations are you most concerned about?

Riders can offer great flexibility and customization to your policy. Some come at a cost, while others are inherent to the policy. With this information, you’re now one step closer to protecting your family financially stability, and securing that peace of mind knowing everything will be okay if you pass away.