If you've purchased life insurance, these circumstances may be covered. Many life insurance policies have extra features that can provide a financial safety net for policyholders and their families while they are still alive.
In addition, there are other perks to save you money or simply make your life a bit easier.
What All Life Insurance Policies Should Cover
Certain standard coverages should be included no matter what type of life insurance policy you choose. Most policies include death benefits by providing a lump sum payout to your beneficiaries in the event of your death. Other common coverages include funeral expenses and estate taxes, which can help alleviate some financial burdens for those left behind.
Additional Perks of Life Insurance
When you look into purchasing a life insurance policy, be sure to read the fine print. You might find that many policies come with added extras. These often incur an additional cost, so you will need to decide which types of cover are most valuable to you.
Added extras are usually sold as either riders or waivers. A rider is an optional policy benefit you can add to your life insurance plan. Riders provide additional coverage and can often be customized to meet specific needs. For instance, a disability waiver rider allows you to waive premium payments during times of disability or illness.
A waiver is similar to a rider, with the difference being that it waives specific requirements or conditions of the policy for the benefits to be paid out. An accelerated death benefit waiver, for example, allows policyholders who suffer from a terminal illness to access their life insurance benefits before they die.
Other common waivers include those for premium payments if you become disabled or can no longer work and those that remove the need to provide evidence of insurability.
Below are some life insurance perks you may not be aware of.
One of the most important benefits of life insurance policies is access to long-term care options, such as nursing homes or assisted living facilities. You can purchase this cover as a separate insurance policy, but it is usually cheaper to purchase it as a rider with your life insurance.
If you require long-term care, this can provide valuable financial assistance to cover the associated costs. These policies pay out either a lump sum or regular payments and may provide coverage for home health care workers, rehabilitation services, and other medical expenses not covered by conventional insurance plans.
Accelerated death benefit
If you become terminally ill, your life insurance policy can provide an accelerated death benefit, enabling you to access a portion of the funds from your policy before you die. This can be extremely helpful if you need financial assistance while battling a terminal illness.
The money can be used for medical bills, treatments, or any other costs associated with the illness. However, the amount you receive from your insurance company, plus interest, will be subtracted from what your beneficiaries receive upon your death.
Some life insurance policies also offer a spouse life insurance rider. This feature lets you purchase additional coverage for your partner without needing separate life insurance policies.
This costs less than setting up two individual policies. However, the coverage may not be as good. Plus, spousal life insurance coverage only applies while the policyholder is alive.
Child term rider
This feature enables parents to purchase additional life insurance coverage for their children. Coverage is limited to a set term based on the child's age. You can add riders for multiple children, including biological, adopted, and step-children.
If your child dies, this benefit will cover medical costs, funeral expenses, and lost income due to bereavement.
Waiver of premium rider
This waiver allows you to suspend your premiums for a period of time if you become unable to work due to a disability or illness. It usually just covers you up to a specific age which can vary between insurance providers and will be stipulated in your policy.
The waiver applies to both the life insurance policy and any additional riders. However, check your policy's definition of “disability.” Many policies will only waive payments in the cases of complete and permanent disability, so if your condition is not permanent, you will not be able to use the rider.
Additional purchase benefit
Additional purchase benefit lets you add more coverage to your policy without undergoing a medical exam. This is beneficial if you need extra coverage but want to avoid the hassle of going through the application process again. You can access this benefit by making a one-time purchase of additional coverage at an agreed-upon price. This extra coverage will then be added to your existing policy.
Annual cost of living adjustments
Some life insurance policies also provide an annual cost of living adjustment to your premium payments. This means that each year, the amount you pay to maintain your policy will be adjusted based on inflation and other economic factors. This prevents you from having to pay more than necessary for your coverage.
Generally, the amount of your premium will be adjusted automatically each year. The amount you can save varies depending on the policy, but you should be able to save a few hundred dollars.
Overloan protection rider
If you have life insurance, it is possible to borrow against your policy's cash value. However, the danger of doing this is that if you do not repay the money, your loan could exceed your death benefit, and the policy could lapse.
Overloan protection riders provide additional security in this situation. If you purchase this rider it will cover any remaining balance on the loan so that your family or estate doesn’t have to worry about it after your death.
Discounts for healthy lifestyle habits
Life Insurance companies want people to be healthy and to live as long as possible, so they will often reward those who actively engage in healthy lifestyle habits such as exercising regularly and eating a nutritious diet.
Insurers usually require you to provide proof of your healthy lifestyle through medical records, health exams, tests, or check-ins with online fitness trackers. This information will be used to verify that you are living a healthy lifestyle and determine if you qualify for any discounts.
For example, Legal & General America offers positive health credits for people who may have a medical issue but live a healthy and fit lifestyle.
Free or discounted health screenings
Some life insurance policies also provide free or discounted health screenings to help identify health issues. This is important for maintaining your long-term health and well-being, as well as creating an accurate picture of the risks associated with your policy.
For example, Haven Life Plus insurance policies include a 15% discount on a CVS MinuteClinic service.
Mobile Phone Apps
Many life insurance companies now offer mobile phone apps that enable you to manage your policy and keep track of payments. And some life insurance mobile apps provide additional features. For example, with Fabric by Gerber Life insurance, you can create a free will and set up savings funds for your family through the mobile app.
Free membership to other services
Some life insurance policies include free membership to third-party subscription services linked to life insurance. For example, Haven Life Plus is a rider that can be added to standard Haven life insurance and gives free membership to Aaptiv, a fitness and workout app, Trust & Will, a will writing service, and Lantern, which offers end-of-life planning.
Adding a Rider to an Existing Insurance Policy
If you are looking for a new life insurance policy, you may know the riders, waivers, and add-ons you want to include. However, what do you do if you already have a life insurance policy? Can you add a rider to an existing policy?
The good news is, yes, you can. In most cases, adding a rider to an existing policy is possible. Before you do so, make sure that your provider offers the desired rider and check the terms and conditions of the policy to ensure that there are no restrictions or limitations on adding additional coverage.
If your current provider doesn’t offer the add-ons you want to include; you can change your life insurance provider. However, it’s important to remember that any changes may affect your policy's premiums and the coverage amount, so be sure to do your research first.
Life insurance can provide financial security for you and your family when needed most, but it pays to understand all the features and benefits available. Consider all the riders, waivers, and add-ons when assessing your coverage needs, as they can provide valuable protection in the event of an unexpected tragedy. With some research, you can find the life insurance policy that suits you best and gives you peace of mind knowing that your family is protected.