Often, the first step in financial planning involves the purchase of two life insurance policies—one covering you and another for your spouse. Depending on your age, the amount of insurance you need, and your health history, you may be concerned about the combined cost of the premiums for the two policies. Luckily, the purchase of one life insurance policy that includes a spousal rider may be an inexpensive solution.
Riders are added benefits that you can attach to your life insurance policy. They can also make a family policy much easier to afford. A spousal rider will pay a benefit on the death of your spouse as long as it occurs prior to, or at the same time as your own. The premium for the rider could be less than a comparable individual policy for your spouse.
With a spousal rider, the coverage of the named spouse ends after the death of the primary insured. This means that the surviving spouse may be forced to get their own insurance policy at an older age and while possibly in worse health than at the time of the original purchase.
You may also be considering a final expense policy for each of your children. Instead of buying separate policies for the children, each with their own premium, why not think about buying one policy with riders to cover the rest? You can add a child rider to cover your children and further expand the umbrella of coverage your single policy provides.
Children can be covered on a child rider until they reach the age of 18. There may be an additional period of time they can be covered if they are full-time college students. As with the spousal rider, the rider will only pay a benefit if the child dies before or simultaneously with the primary insured.
If you are concerned about an accidental death causing undo stress to your family and creating additional unexpected costs, you might consider adding an accidental death benefit (AD&D) rider to your policy. The AD&D rider provides an extra death benefit should your death occur as the result of an accident. Be sure to read the terms of the rider carefully to understand what the insurance company considers an accidental death. Illnesses, biological events and other causes of death may not be defined as accidents by the insurance company and will not be payable.
Life insurance can be customized to suit the needs of any person. With the use of riders you can end up with an affordable policy that covers a wide range of events and requires just one premium payment each year.