Understanding term life insurance riders and add-ons

Term riders offer you flexibility, extra coverage, and added peace of mind. 

You may have heard about term life insurance before. As a quick reminder, it offers temporary coverage if something were to happen to you. Term insurance is an excellent option for many people, especially when you think about the many ways you can customize a policy.

Customizing your term life insurance is possible thanks to riders. If you’re thinking about getting a term policy, it’s a good idea to brush up on all of your coverage options. Here’s what you need to know about term life insurance riders to make the most of your term policy. 

What is a term life insurance rider?

Put simply, a term life insurance rider is an additional type of coverage you can choose to add to your term policy. (Riders are also called add-ons.) Just like a term policy itself that is meant to last for a set number of years, riders are the same — temporary. They add a certain type of coverage on top of or in addition to your base term life policy. 

What are some common term life add-ons?

You’ll have a few riders to choose from with most term insurance policies. For the most part, you’ll need to request that a rider be added to your policy. 

For instance, we offer something called “stacking” here at Legal & General America. Stacking gives you the option to add extra life insurance when certain life events happen. Those events might include getting a promotion and a bump in your salary, or buying your first home. When those life events occur, you can “stack” 10, 15 or 20 years of additional coverage on top of your base policy. When those stacked term riders expire, we automatically remove them from your policy — and your payment will drop back down, too.

Another common option is a child rider, which provides coverage for multiple kids (even for your future little ones) with one flat fee. As your kids grow up, they can choose to turn that term rider into a permanent life insurance policy without going through a medical exam. If a health condition pops up that might prevent them from qualifying for a new life insurance policy, they’ll still have the option of buying a policy from us via that term rider. This add-on is a wonderful way to ensure your children have access to life insurance as they get older.

The accelerated death benefit rider is one we automatically add to our term life policies. If you should develop a terminal illness during your coverage term, you can request an advance payout on your policy. Some people use the money for final expenses or medical costs. Others use the money to take their family on a trip to create special, lasting memories for their loved ones.

Why should I add a rider?

Term life insurance riders let you customize your term policy based on your individual needs. Beyond that, they offer a way to protect your future and that of your loved ones, too. 

With a child rider, you’re ensuring your children can access life insurance, even if health conditions pop up later in life. That’s an amazing gift to give them! 

And if you choose stacking, you’re offering your future self the option of extra coverage for certain life events. This can often save you money, since you won’t have to buy completely new policies. 

How much do term riders cost?

As with life insurance in general, the cost of term riders will vary. Some term life riders, like the accelerated death benefit rider, are added to your policy automatically at no additional charge.

Other add-ons, like the children’s term rider, add some cost to your policy. But that price will be a flat fee that doesn’t change — even if you have multiple children. If you’re curious about the cost of term life insurance riders, you can speak with one of our advisors. They will be happy to provide you with a personalized quote.

When should I add a rider to my term policy?

It’s really important to note that you can typically only add a rider to your policy when you buy it. So, if you’ve been considering buying a term life insurance policy, take some extra time to think through all of the available add-ons. It’s okay if you don’t feel you need any of them, but it’s a smart idea to allow yourself some time to evaluate all of the options.

Term riders offer added security 

As you can see, term life insurance can easily be customized by adding certain riders to your policy. Because riders must be added when you first purchase your policy, you’ll want to take some time to review all of your options. Part of that process should include a look at quotes, since some term riders are free while others have a fee. 

Ultimately, term life insurance riders offer a lot of flexibility and a lot of protection in unforeseen circumstances. After all, no one can predict what will happen! Term add-ons give you peace of mind knowing your and your loved ones are covered now and in the future.