Riders: which ones are worth the premium

A rider modifies a policy, adding a benefit or an option for additional premium. Some are valuable, several are marginal, and a few solve problems better addressed elsewhere.

The genuinely valuable ones

Waiver of premium. If you become totally disabled as defined in the policy, premiums are waived and coverage continues.

This is worth having. The circumstance in which you become disabled is precisely the circumstance in which paying premiums becomes difficult, and lapsing life coverage while disabled is a serious outcome.

Check the definition of disability used and the waiting period before the waiver takes effect.

Convertibility, on term policies. The right to convert to permanent coverage without new medical underwriting.

Frequently included at no additional cost, and the terms vary — check the conversion deadline, which may be earlier than the end of the term, and which permanent products are available.

This protects against becoming uninsurable, which is the main risk with term coverage.

Guaranteed insurability or future increase option. The right to purchase additional coverage at defined future dates or on defined life events, without medical underwriting.

Valuable for young buyers whose income and obligations will grow, and for anyone concerned about future insurability.

Accelerated death benefit for terminal illness. Allows access to a portion of the death benefit on diagnosis of a terminal condition with limited life expectancy.

Frequently included at no cost. Note that the accelerated amount reduces the death benefit and may have tax implications depending on circumstances.

The ones that depend

Chronic illness or long-term care riders. Allow access to death benefit if you require assistance with activities of daily living.

Genuinely useful for some people and generally less comprehensive than standalone long-term care coverage.

Key questions: what triggers access, how much can be accessed and how quickly, whether the benefit is reduced by more than the amount accessed, and whether it is a discounted acceleration or a true additional benefit.

Compare against standalone long-term care insurance and hybrid products before deciding.

Return of premium, on term policies. If you survive the term, premiums are refunded.

The premium is substantially higher — frequently double or more — and the refund is not adjusted for inflation and earns nothing over the period.

The comparison is against buying standard term and investing the difference, which for most people over a twenty or thirty year period produces a better outcome.

It appeals because getting money back feels better than getting nothing. That preference is understandable and it is expensive.

Child rider. Small amount of coverage on children, frequently convertible to an individual policy without underwriting.

Inexpensive. The main value is the conversion right, which guarantees future insurability for the child.

The death benefit itself is generally not needed, since children do not produce income the household depends on. Funeral costs are the honest justification and they are modest.

The ones generally not worth it

Accidental death benefit. Pays an additional amount if death results from an accident.

Accidents cause a minority of deaths, particularly at older ages. Your family's financial need does not depend on the cause of death.

The right answer is generally to buy the amount of coverage you need for all causes rather than extra coverage for one category.

Disability income riders on life policies. Generally provide less comprehensive coverage than a standalone disability policy, with weaker definitions.

If you need disability coverage, buy disability coverage.

Critical illness riders. Pay on diagnosis of specified conditions.

The value depends entirely on the definitions, which are frequently narrow and specific — a heart attack must meet defined clinical criteria, a cancer must be of a specified stage.

Read the definitions before assuming a diagnosis would trigger payment. Many do not.

The general approach

Riders are additional products bundled into a policy, and they are priced accordingly.

The question for each is whether it solves a real problem better than the alternative.

Waiver of premium and convertibility generally do. Guaranteed insurability frequently does.

Most of the rest are addressing risks that are either better covered by dedicated products or better handled by buying an adequate death benefit in the first place.

The questions to ask

What exactly triggers this benefit, in the policy language rather than the brochure?

What does it cost, separately identified?

What is the alternative way to address this risk, and what does that cost?

And is there any circumstance where I would have this rider and still be uncovered?

A good advisor answers all four specifically. An answer that consists mainly of reassurance is a signal to look at the policy language yourself.

General information about insurance products, not insurance or financial advice. Rider availability, definitions and pricing vary by insurer and state. Read the policy language and consult a licensed advisor.