Life Insurance Riders: What You Need to Know

Life insurance riders are optional additions to a policy that provide supplemental coverage or benefits you wouldn’t receive otherwise. They can help you personalize your policy to fit your and your loved ones’ needs.

The life insurance riders available to you will depend on the insurance company and type of life insurance you get. Some riders are available at no charge, while others cost extra.

You generally need to opt in to riders when you buy your life insurance policy — most can’t be added later.

» MORE: Get life insurance quotes

Learn more about the major types of life insurance riders and which might be right for you.

• Accelerated death rider: Pays out while you’re still alive with certain terminal illnesses.

• Accidental death rider: Pays more to beneficiaries if you die from certain accidents.

• Child term rider: Covers children under your policy.

• Guaranteed insurability rider: Allows you to buy more coverage later with no medical exam.

• Long-term care rider: Pays out while you’re still alive to cover long-term care costs.

• Return-of-premium rider: Pays you back if you outlive a term life policy.

• Waiver of premium rider: Pauses your premiums if disability makes you unable to work.

• Other life insurance riders.

» MORE: How do life insurance policies work?

Accelerated death benefit rider

How it works: An accelerated death benefit allows you to access part or all of the policy’s death benefit while you’re still alive if you have a terminal illness. While there are no restrictions on how the money can be used, this rider can be a helpful way to pay for medical care and treatments.

This rider is a type of life insurance living benefit — a policy feature that lets you tap into your policy’s payout while you’re living.

This rider covers only specific situations, which can vary by insurer, so be sure to check with your provider. A qualified event could include:

• Diagnosis of a terminal illness, confirmed by a doctor.

• An organ transplant.

• The need for continuous life support or long-term care.

• A permanent move to a nursing home.

What it costs: Many insurers include an accelerated death benefit rider at no additional cost, but may charge a fee for you to access the benefit. Any payouts from this rider will be subtracted from the policy’s total death benefit once you die. So, if you receive 100% of your policy coverage amount from an accelerated death benefit rider payout, your beneficiaries won’t receive a life insurance death benefit. If you have accrued a cash value on your policy, this may also be reduced.

Payments are usually tax-free, but there are exceptions. Payouts from an accelerated death benefit rider could also affect your ability to collect Medicaid or Social Security payments.

» MORE: Is life insurance taxable?

Best for: People concerned about affording end-of-life care or other significant expenses related to terminal illnesses.

Accidental death rider

How it works: An accidental death rider increases the payout to your life insurance beneficiaries if you die from a covered accident, like drowning. It’s sometimes referred to as a “double indemnity” rider, because it can double the amount of money your beneficiaries receive. A stand-alone life insurance policy will cover accidental deaths — this rider simply provides a higher payout for beneficiaries in that case.

However, the death must occur within a set period of time after the accident, such as 90 days, for the extra benefit to pay out. This rider also comes with exclusions and won’t pay out under certain circumstances, such as death from:

• Disease.

• Mental illness.

• Alcohol in combination with drugs or medications.

• Rioting.

• Suicide.

An accidental death rider is different from an accidental death policy, a stand-alone life insurance policy that pays out only after a death from a covered accident.

What it costs: An accidental death benefit rider typically comes at an extra cost. It can be added to a term or whole life policy without a medical exam up until you reach a certain age, around 65 years old. Payouts from an accidental death rider may decrease after you reach a certain age, usually around 70.

Best for: People who might want to provide a larger payout for beneficiaries in the event of a sudden, accidental death.

» MORE: Life insurance vs. accidental death and dismemberment insurance

Child term rider

How it works: You can add a child term rider to cover your children on your policy instead of purchasing separate policies for them. These riders pay a small death benefit, often from $5,000 to $25,000, if a child dies before reaching the “age of maturity,” typically around 25 years old.

Biological children, stepchildren and legally adopted children can be added without the need for a medical exam. Plus, any children born or adopted after the rider is in place will also be covered.

The rider is tied to the legal guardian’s policy, so if that expires, so does the coverage for the child. You may be able to convert the rider into a permanent life insurance policy for your child once they reach the age of maturity, but some restrictions could apply.

What it costs: Child term riders are relatively inexpensive. For example, $10,000 worth of coverage might cost around $5 per month.

Best for: Parents who might need help covering final expenses if a child dies.

» MORE: Should you buy life insurance for children?

Guaranteed insurability rider

How it works: A guaranteed insurability rider will allow you to buy more life insurance coverage in the future without the need for a medical exam or health questionnaire.

Typically, you can increase coverage every three to five years during “option periods” — windows of time when you can purchase additional coverage within a predetermined range. You may also be able to top-up your coverage at the time of major life events, like getting married or having a child. You can usually buy additional coverage until you’re 40 years old.

What it costs: Some policies might include a guaranteed insurability rider for free. If there’s an added cost, it might be either a percentage of the premium for the policy itself or a flat dollar amount per month.

Best for: People who want some life insurance coverage immediately but might be in a better financial position to afford more in the future.

Long-term care rider

How it works: A long-term care rider allows you to access your life insurance death benefit while you’re still alive if you have a chronic illness and are unable to complete daily living tasks, like bathing, eating or dressing. The money you receive can be used to manage your day-to-day care.

There are generally two types of long-term care riders:

• Reimbursement riders will pay you back for what you spend on long-term care expenses, up to your policy’s monthly limit.

• Indemnity riders pay out a predetermined monthly benefit, regardless of the actual long-term care expenses you incur. 

What it costs: A long-term care rider makes your monthly premiums more expensive. How much it costs can depend on similar factors to your life insurance policy, such as your age, health and amount of coverage.

Best for: People concerned about affording long-term care, which, unlike most other health care, isn't covered by Medicare.

» MORE: Life insurance with long-term care benefits

Return-of-premium rider

How it works: A return-of-premium rider refunds some or all of your premium payments if you outlive your term life insurance policy. It can be added to a new or existing term life policy.

What it costs: A return-of-premium rider comes at a high price — it could more than triple the cost of your premium. And you generally won’t get a refund for any extra policy fees or other add-ons you paid.

Some insurers allow you to use all or half of the refund toward a new policy without needing another medical exam if you want to continue your coverage.

Best for: People who expect to live past the term of their life insurance policy and can afford to have the rider costs tied up until the term ends.

» MORE: Best return-of-premium policies

Waiver of premium rider

How it works: A waiver of premium rider pays your life insurance premiums if you become totally disabled and can’t work. Covered disabilities may include permanent illness or a severe injury, such as loss of sight.

You will likely need to provide statements from both the Social Security Administration and a physician as proof of your disability, and may need to show updated statements every few years.

You may have a waiting period before this rider pays out, usually around six months. But if your claim is approved, you’ll be reimbursed for the premiums you paid during the waiting period. Your premium payments will be covered until you’re no longer disabled or until you reach a certain age, typically from 65 to 70.

Generally, a waiver of premium rider can be added to a policy only at the start of coverage, and you cannot have a pre-existing disability at the time of purchase.

What it costs: A waiver of premium rider can add a significant amount to your premiums. Specific costs can vary by age, health and coverage amount.

Best for: People who want to be certain their life insurance policy remains in place even if they can no longer work to pay for premiums in the future.

Other life insurance riders

Not all insurance companies offer the same riders, so it’s important to shop around and ask which are available. Here are some additional riders you could come across:

• Chronic illness riders let you access part of your death benefit while you’re still alive if you’re diagnosed with a condition that requires extensive medical care and assistance. 

• Cost-of-living riders gradually increase the policyholder’s coverage to align with inflation and the Consumer Price Index. Premiums will also increase. 

• Critical illness riders allow policyholders to receive money if they experience a critical illness, like a heart condition or stroke.  

• Disability income riders provide monthly payments if the policyholder is disabled and can’t work for a specific period of time. Payouts are typically a percentage of the total policy’s coverage amount. 

• Family income benefit riders provide monthly payments to the beneficiaries if the policyholder dies.

• Guaranteed renewability riders give you the option to renew your term policy without taking another medical exam. 

• Overloan protection riders keep a permanent policy from lapsing even if you borrow too much money against your cash value.

• Paid-up additions allow you to boost the cash value of a permanent life insurance policy by paying extra premiums early on.  

• Spousal insurance riders pay out if the policyholder’s spouse dies, but typically don’t offer as much protection as if the spouse had a separate policy. For example, if the policyholder dies or the marriage ends in divorce, then the spouse will lose coverage. 

• Term conversion riders allow you to convert a term life policy into a permanent one, usually without the need to complete a medical exam. 

• Term insurance riders offer additional coverage on a permanent life insurance policy for a fixed amount of time.

• Transfer of insured riders, or insurance exchange riders, are common with key person insurance policies. A business may buy this type of policy on its most important employees, such as a CEO. With a transfer of insured rider, the business can switch the coverage to a new person if the insured employee leaves the company.

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Riders for term vs. permanent life insurance

This is the typical availability of the more common riders. Some insurers may not offer these riders at all or may restrict them to one type of policy.