Life Insurance Riders: Benefit Structure Riders

Aug. 8, 2019

When you are shopping for life insurance , you might come across an option to add riders to your policy. Life insurance riders are add-ons to your life insurance policy that can provide extra financial protection while you are still alive.

In this article, the last of our riders series, we are diving into the return of premium rider, as well as term conversion and guaranteed insurability.

Return of Premium Rider

Also known as a cash back option, this rider makes it possible for you to be reimbursed for all the premiums that you paid into the policy if you live past the term of the coverage. For example, let’s imagine you have taken out a term life insurance policy designed to last until your mortgage is paid off in full. If you were to outlive the policy term, the cash back option could refund the entire amount that you paid into the policy.

This rider would be appealing to anyone worried about the money they’re putting into a term life policy: with the cash back option they’ll have the opportunity to earn all the money back. The money returned is not taxable (it’s considered a refund), but keep in mind that the refund does not include any interest paid towards the coverage. Although the return of premium rider could cost a little more each month, many people find satisfaction in the fact that they can get a return on all the money they paid into the policy over the years.

Whether you’re hoping to have some extra money to put into your retirement or you like the peace of mind knowing you can receive the money you paid into the policy at the end of the term, a cash back option might be the right choice for you.

Term Conversion

This rider is important when you are reaching the end of your term life policy. If you decide that you want additional coverage beyond your designated term, this gives you the option to convert your policy into permanent life insurance without having to be approved a second time.

Essentially, this rider gives you the ability to transition your policy into a whole or universal life policy without the stress of being approved again. Because of this, even if you develop health issues that would normally make you uninsurable, you’re still able to skip the process of being approved.

If you’re interested in converting some or all of your existing policy in the future, you will be happy to know that this rider exists. By using term conversion, you can opt to extend your term life policy to cover the rest of your lifetime.

Guaranteed Insurability

Like the term conversion option, the guaranteed insurability rider gives you the option to add additional coverage onto your existing policy. With this rider in place, you will be able to add onto your policy every few years, marking the anniversary of when you first purchased the coverage.

If you’re worried about your health declining over the term of your policy, this will ensure you’ll have the ability to double down on your coverage every few years.

The Bottom Line

This concludes our series on life insurance riders. While each of these riders differ in terms of how much they might increase your monthly premiums, they all have exclusive benefits that can help you get the most out of your life insurance .

From the peace of mind that comes with guaranteed insurability to the appeal of receiving your monthly payments back for retirement, each rider can help you modify your term life policy to meet your unique needs.

Are you interested in getting life insurance? All you need to do is fill out our quick and easy form to request a quote and we will connect you with a Symmetry Financial Group Agent who can help you choose the best policy and riders for your needs. Let’s get started!


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