When you want your insurance policy to give you more coverage options than intended initially, you go for extras. Because life coverage policy is like a suit – you have to make it fit you, otherwise there’s no point in wearing something that’s uncomfortable. And like when you go to the tailor, to make your suit fit, you buy extras and raiders to make the policy fit your insurance needs perfectly.

But what is a rider in the first place?

Legally speaking, a rider is a document containing certain provisions that are not included in the initial policy, and which are to be enclosed to the present policy when signed. But don’t think that it will cost you much, because the majority of riders are inexpensive compared to the initial prices of the policy. They require less underwriting and thus come with a reasonable pricing while providing coverage in cases you think are important for you.

Insurance companies offer a wide range of raiders designed to cover a variety of situations and circumstances. Some of these riders are best suited for term policies, while others are designed specifically to be included into continuous policies. Here are some of the most popular riders you might think about getting from your company.

Guaranteed insurability

Also referred to as “future purchase option,” this type of rider is only available for purchase with your continuous life coverage policy. It provides you with a possibility to get additional coverage when reaching a specific age without the need to prove your insurability. This often comes in handy when there are changes in your life like marriage, child birth, change of job, etc.

Waiver of premium

In case you are unable to work due to serious injury or disease, paying for life insurance can become quite problematic. This rider will pay your insurance premium if you become disabled or seriously sick without a steady source of income.

Additional family member

This is a great way to get cheap life insurance for your family while still having everybody covered adequately. Instead of buying stand-alone policies or including your family members to your permanent insurance policy, which will be quite costly, you can purchase this rider, which is a form of term coverage, and get the coverage you need for a far lower price.

Accidental death

Also referred to as “double indemnity,” this rider will pay out double the coverage amount of your policy if you die because of an accident. It is especially important if you have a high risk of having an accident at your work.

Living benefits

This rider will pay out a part of your benefit when you are still alive should you develop a serious illness or injury that will require long time care or nursing. The benefits will of course be adjusted accordingly, but the rider gives you and your family the necessary financial support during the tough period.

Conversion term insurance

This is a great option for those who don’t have the money for a continuous policy right now but would like to use its benefits in the future. When you purchase this rider with your much cheaper term insurance policy you reserve the right to convert it into a continuous one when you have the money for it, without having to buy a new policy.

When looking for riders, shopping around also works great. Remember to get life insurance quotes on the riders you would like to purchase and go with the most competitive offers.

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When it comes to comparing different types of insurance policies for covering your life term insurance policies turn out to be the most simple and inexpensive. If your insurance needs don’t require sustaining a policy for your entire life, you may find it very appealing to get a term policy especially with the price tag being times smaller than of continuous policies.

Why term policies are the cheapest option for life coverage?

Term insurance policies will cover you only for a specific period of time. They also usually have pre-set premiums and fixed amounts of benefits to receive. Term policies can last from one to 30 years, but the most popular options are 10 and 20 year term policies. The vast majority of these policies cannot be renewed and the chances for the insurance company to pay out death benefits on term coverage policy are minimal. In fact, only about 1% of all term insurance policies actually give out a death benefit to their clients. That’s why the insurance company can place a significantly lower price tag on such a product.

Why taking term insurance coverage?

Term insurance policies are aimed at covering certain types of debts in case the policyholder is disabled or dies. Some debts that term insurance coverage may pay for include:

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The first step
When a loved one has expired and the funeral formalities are finished, you, the beneficiary needs to submit a certified copy of the death certificate to the insurance company. The death certificate is a must in order to file an insurance claim. Instead of contacting the insurance company, contact the agency or agent that sold the policy to the insured. Numbers of both the agent/agency and the life insurance company are usually found on the policy itself. The agent will help you understand the procedure better, and will ease the process for you in your time of grief.

Death benefit payout options
When your claim has been filed and approved, the life insurance company will ask you how you would like to receive the death benefit amount. There are two main payout options:

Lump Sum
Almost every term life insurance policy allows you to withdraw the entire death benefit amount in a lump sum. Most beneficiaries opt for this payout plan if there are pressing financial commitments like loan payments or an urgent need for the entire amount. Some beneficiaries prefer to withdraw the entire amount, and then direct it to tax-deferred investment vehicles.

Annuity Methods
For those who do not wish to receive the death benefit in a lump sum, life insurance companies offer several types of annuity (yearly) payout options depending on how you want to receive the amount. These include:Life income: The beneficiary is guaranteed an annual income as long as he or she lives. The insurance company determines the payment amounts based on the age and gender of the beneficiary. If the beneficiary dies, the insurance company retains the balance amount.Life income, period certain: The beneficiary is guaranteed an annual income for life, or a specified period of time, whichever is longer. If the beneficiary dies before the specified period, his or her beneficiary i.e. a second beneficiary receives the outstanding payments.Last survivor income: If there is more than one beneficiary, life payments will be made until the last surviving beneficiary dies.Specific Income: The beneficiary gets to choose how much and for how many years death benefits will be received, until the entire death benefit is exhausted. If the beneficiary dies before the last payment, his or her beneficiary receives the remaining payouts.Interest income: This is a great option for minor beneficiaries. The beneficiary is guaranteed payments on the interest paid on the death benefit for a specified time, or until the beneficiary reaches a certain age. The original benefit is then made available to the beneficiary.

Always think your options through
Before choosing a payout option, evaluate your financial needs to determine which option is best for you. It is always wise to speak to a financial advisor or a tax consultant. Though the payment options are relatively simple and easy to comprehend, it is wise to understand them thoroughly and know the implications of each kind of payout method. Beneficiaries must be aware that though the lump sum benefit is tax-free, all interest amounts received on the lump sum are taxable.

If you do not own a term life policy yet, the Internet is a great place to shop around and get free term life quotes. Just make sure that your beneficiaries are kept in the loop about the options available to them when claiming your death benefit.

About the Author
About AccuQuote:
AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.

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You will have noticed that women live longer than men. There are a number of explanations for this, but the reality is simple. Women have always had stronger levels of immunity to the diseases that strike down men. They are also more careful and less likely to be killed in traffic accidents or while indulging in dangerous sports. This reflects the gender roles with women acting protectively over their children and, in later years, acting as the primary caregivers to older family members and relatives. This throws up the first major decision. If a woman is going to leave dependents behind her, there will be a need to leave a more substantial lump sum behind. Women multitask and buying in professional help to do all the work is expensive. Whereas it’s estimated that men should leave an average of seven times their average pay, women with dependents should aim for a multiple of not less than ten. The plan should be to provide a substantial lump sum that can be invested and generate an income to supplement the capital for those who remain.

With family responsibilities, the second decision is the type of policy to buy. If your budget is tight, there will be a temptation to buy the cheaper term insurance. But, with life expectancy extending, you are gambling you will not outlive the policy. Remember, there is no payment if you are still alive when the term ends. Although permanent insurance costs more, it gives a valuable safety net for your dependents. More importantly, a permanent policy has a cash value and this can give you access to money if expenses are threatening to overwhelm you. So when you start shopping around, always get life insurance quotes from the widest possible range of companies. Then check out that they are financially stable. You need your choice to be around in the decades to come. It’s also a good idea to find out whether the company offers an advice service to help older people manage their money. So don’t stop when you get a list of the life insurance quotes using the online search engine. Talk to the companies before deciding which is going to offer you the best deal.

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From these short sentences, you will immediately suspect the other difference between the products. Term life insurance is the cheap option. It gives you security in the amount of the benefits for the number of years you select. If you buy one term policy after another, the premiums are higher each time because your life expectancy is less on each renewal. Permanent insurance premiums are higher because a percentage of what you pay is invested on your behalf to generate the cash value. So your fund receives the benefit of the interest, dividends and other returns the investments generate. This makes the total of the cash value the key factor. Do you want a higher rate of return on the premiums? This can be for your own benefit should there be an emergency during your life. Or it can build up over the years for your dependents. If the answer is yes, you must be prepared to pay more to start off the policy — the first year’s premiums often disappear into a black hole representing set-up costs and the selling agent’s commission. But the amount you pay stays the same throughout the lifetime of the policy. So, with inflation, what starts out a struggle slowly grows easier to pay.

The real problem is the uncertainty of the future. Who knows how inflation may affect different aspects of life. What may be cheap now, may be expensive tomorrow and vice versa. So here are a few simple rules. If all you want is cover over the next few years (no more than ten), get life insurance quotes for a term policy. Ten years is not a long enough period of time to build up a worthwhile cash value. Estimate what benefits might be needed, e.g. your daughter will need $50,000 to cover her college tuition fees, and the total will set the amount of the insurance. If you are looking at a period of at least twenty years, you should think seriously about permanent insurance. Again, get life insurance quotes but you should also take advice on the different types of policy available and create or review your estate plan. Between ten and twenty years is a gray area and whichever way you decide is not going to be wrong.

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Layoffs, unemployment and recession are actually indicators of a need to seriously reevaluate your life insurance needs, and purchase additional term life insurance if required. If you have no life insurance at all, this is the time you must consider purchasing a new policy. Things may be bad now financially, but think how the situation could get even worse for your family if you were no longer around. Left with unpaid loans and mortgages, monthly expenses, and no life insurance to soften the blow, they would be in dire financial distress even while grieving the death of a loved one.

According to life insurance experts, a rising unemployment rate and a recessionary economy are surefire signs that indicate the need for increased life insurance coverage. Sadly, most Americans are doing the opposite

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How can one determine whether they need life insurance? It’s not that hard like you would imagine. This decision depends on your current responsibilities you bear. If you have dependents, a spouse, a mortgage loan or any other aspects that should be secured no matter what, you will definitely find it useful to buy life insurance coverage.

Once you have decided on buying life insurance, it’s time to determine how much coverage you actually need. It’s important, because the amount of coverage carried by your policy strongly affects the cost of your policy. There are no strict rules and methods of defining the amount of coverage as there are many factors involved (number of dependents, your income, your loans), however you can start with multiplying your annual salary by 5-10 to get an approximate number.

Deciding on the type of insurance you would like to buy is also a complex question that needs detailed analysis. Most insurance experts agree that younger people with no serious obligations and serious health risks should consider term life insurance. Term policies are a real cheap life insurance option, however they do not carry any additional cash value besides providing a death benefit. Whole life insurance policies offer cash value and additional investment options, but are much more expensive, especially in the first couple of years after signing them. So define your real insurance needs and choose the type of insurance that appeals to you the most.

When you have strictly defined what policy you want to get, don’t rush getting it from the very first insurance company you can find. Shop around and make sure to get plenty of insurance quotes from reputable companies licensed in your state. You will be surprised to learn that the very same insurance policies with the same coverage amounts can be priced quite differently between companies, and it’s a really great way to get cheap life insurance. Some insurance companies will offer discounts to customers that already have other types of insurance policies with them. So if you have homeowners or auto insurance with a company that also provides life coverage, it may be a good option for cheap life insurance in your case.

Remember that the more time you spend considering and comparing your options, the easier it will be for you to find a policy that you will really be happy with. Don’t rush with your decision and get the offer you really think will match with your needs without any compromise.

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And as you get older and your needs change, so will the policy covering your life. Insurance policies mature just like people, being paid off entirely and ready to be used when the moment comes. During this period some people may wish to sell their policies, as they are already paid for, and get the benefits without meeting insurance conditions. This is what insurance experts call “cashing in the policy”. Such a possibility is a great investment option as it allows you to finance things like your kid’s college education or your individual retirement fund when the need for such things becomes evident.

Fact is that a large part of life insurance policies available on the market today come with such adjustment possibilities. Insurance companies have become more flexible in terms of what you can do with your policy when you have paid it out in full. You can easily convert it to stocks, bonds or other financial tools you may find useful. Of course, when you choose to buy cheap life insurance solution the odds are that you won’t have many of such possibilities carried with it. You get what you pay for, and sometimes it really pays off to spend a bit more money.

The only thing that isn’t likely to change over the years is the amount of benefits your family will receive in case something happens to you. And the amount to be received will be the same with most policies, no matter for how long you have the current policy: several months or twenty years. This fact gives you a piece of mind in terms of coverage and return on investment, because you will be able to receive your benefits regardless of when you need them.

There are also certain types of policies that allow you to use the money from your policy in certain circumstances before you have paid out the policy in full or your insurance terms has passed. Such circumstances include serious illnesses, diseases or injuries that require long-term care or nursery, and leave you without a source of income for a prolonged period of time. These types of policies will certainly appeal to those who actually have increased risk of having such diseases or injuries due to their everyday activities.

But no matter what type of policy you choose to have for insuring your life, you have to remember that shopping around is really important in this market. There are many places you can get life insurance quotes and you should definitely do so, because sometimes the same policy with the same options and coverage amounts can cost quite differently between two companies. And why would you want to pay more?

If you’re thinking of applying for life insurance, looking for a policy or maybe wanting to change your existing policy then it’s best to begin forearmed with a little knowledge of what you’re seeking. Obviously you’ll want to be sure you’re paying the most competitive life insurance premium available for the type of policy you’ve chosen.

When people talk about life insurance, most people groan as they think finding and taking out insurance is a lot of hassle or that it might be too expensive. But when the inevitable happens, as it ultimately will, do you want your loved ones to be financially secure or struggle?

Finding the Best Life Insurance

Where do you look if you are in the market for insurance? Here are a few good places to look, but be advised the list is not complete and there are lots of places where you can find insurance. Don’t be fobbed off with any type of insurance either, and you want the best life insurance premium too.

Take the time to speak to a professional advisor about your options. They’re likely to know more about the intricacies of various policies and will be able to help you find the right one for you.

Shopping for the Best Life Insurance Premium

An advisor may also be able to give you some practical tips on ways to reduce your premium. You may consider what exclusions you need or perhaps you might consider various lifestyle factors that can determine how much you pay on your current premiums.

You should also carefully consider the payout figure you’re insured for. If you’re insured for a very large sum of money, this can often increase the amount you pay on premiums. Be realistic about the amount your beneficiaries will need to survive financially if something happened to you and consider reducing the payout figure if necessary. This can lower your premium payments.

Lifestyle and Career Choices

While the right type of insurance is important and best fits your circumstances, factors like age, smoking, and your occupation all come into consideration. Hazardous occupations may incur a steeper premium rate. Likewise, smokers may find themselves paying higher premiums.

Some insurance companies may penalize people who are a little overweight, as obesity can often lead to an increase in health risks, which increases your premiums in turn. In order to reduce your premiums, consider working on raising your fitness level a little. Not only will you feel healthier, but you’ll lose a little weight at the same time and lower your life insurance premium.

Another good tactic is to ask for quotes from several different companies selling life insurance. You are not obliged to take out their policies if you do not want to, but it can help you to see what cover is available and you’ll also be able to accurately compare the life insurance premiums available to you.