When it comes to life insurance, one size doesn't always fit all. You might have needs or circumstances that aren’t addressed by a standard policy. Fortunately, you can customize your policy with add-ons such as the disability rider. We’ll give you a quick recap on riders below, but feel free to skip ahead if you’re ready to dive in.
What Is A Rider, Again?
Basically, a life insurance rider is an optional set of additional terms you can choose to add to your life insurance policy. Think of them as optional extras you can pay to add for additional benefits. These can help fill in the gaps with a standard life insurance policy should your circumstances change. We sort of touched on this topic last week.
Then, What’s A Disability Rider?
A disability rider is a special kind of waiver of premium rider that covers you if you become disabled and unable to work. This means you can keep your insurance coverage without having to worry about making your premium payments. Some disability riders also offer supplementary income to help make up for your loss of income.
How Does It Work?
If you buy a disability rider with your life insurance, you won’t be required to pay your policy’s premiums in the event of a disability that prevents you from working. In such a situation, your life insurance coverage would continue, but you will no longer have to pay the premiums while you cannot work. Think of it as an extra layer of protection in a worst-case scenario.
Are There Restrictions?
There are a few limitations. You will not be able to purchase a disability rider if you are over the age of 65 or have pre-existing conditions. Most disability riders require a waiting period of up to 6 months before the waiver of premium kicks in. Also, note that every insurance policy has its own definition of "totally disabled," so it is important to look at your specific policy to see what will be covered.
Do I Really Need One?
When considering this question, it is important to weigh your needs against the cost. If you rely on income from a job you could not perform if disabled, this type of rider might be worth considering. Disability riders can be especially important for those with high-risk jobs like police officer or firefighter. The risk level of your profession is taken into consideration, which can result in higher premiums. These may be more of a hardship to pay if your income suddenly stopped. High-risk jobs aside, it’s important to keep in mind that accidents can happen to anyone.
Disability riders don't make sense for everyone but can give you peace of mind against the unexpected. With so many options to consider, shopping for a life insurance policy can feel overwhelming. So, we’re always here to help you find the best fit for you. At Ethos, we make it easy.