3 Life Insurance Riders That Are Worth Paying For

Don't buy a life insurance rider without reading this.

Life insurance provides coverage to protect the policyholder's loved ones. It pays out a death benefit if the covered person dies while the policy is in effect. It is a very important type of protection that most people should seriously consider putting in place.

When a person buys life insurance, they don't just have the chance to buy a standard policy that pays out money to chosen beneficiaries. They also can add "riders" onto the policy. These offer additional coverage.

While some riders can be worth paying for, others may actually be a waste of money. Here are some of the riders that life-insurance buyers may want to carefully consider purchasing because of the benefits they offer.

1. Guaranteed insurability rider

A guaranteed insurability rider can be a great add-on to a life insurance policy for anyone who wants to make sure they always have the right protection in place even if their life circumstances change. These riders make it possible to add additional coverage without having to complete another medical exam or answer more questions about health status. That means even someone who had developed serious medical conditions would be able to get more life insurance.

Guaranteed insurability riders generally allow the policyholder to increase coverage every three to five years, and/or when predetermined events happen such as getting married or having a baby. It can be well worth it to pay for the option to do this since this enables consumers to get only the coverage they need when buying the policy and add more later.

2. Accelerated death benefit rider

An accelerated death benefit rider typically allows a covered policyholder to access part or all of the death benefit on the policy after being diagnosed with a terminal illness or suffering some other type of qualifying event such as a permanent move to a nursing home or an organ transplant.

Accelerated death benefit riders can make it possible to cover costly medical bills at the time when a serious illness occurs so there's no need to worry about money when focusing on a medical crisis. The fees typically are very low for this type of add-on coverage, and some insurers don't even charge anything extra for it at all.

3. Cost of living riders

This type of rider enables the policyholder's coverage to increase during times of high inflation. Premiums usually increase, but it may still be worth buying this kind of protection since the current surge in prices shows how detrimental inflation can be to financial security when the cost of goods and services is rising rapidly.

These are just three of many potential riders that may be available, but some -- such as add-on coverage for children -- may not be worth buying because they are either unnecessary or because they cost more than they are worth.

It's important to research exactly what each rider will do and conduct a cost-benefit analysis before deciding if it is worth adding on to a life insurance policy. That way, consumers can get the coverage they need without paying out a lot of money for unnecessary insurance that won't benefit them or their loved ones much in the end.