Term Life Insurance With Disability Rider By Sharon Taylor At Isnare.com Ezine Articles

As all industries are always trying to find a need that appeals to the mass markets, insurance companies have come up with a way of adding a disability rider to your term life insurance policy for those that desire the combined coverage. This type of coverage would be ideal for those who work in occupations that require and rely on the constant use of their bodies and frequent physical activity. Having some security in knowing bodily injury would not mean complete financial ruin makes a term life policy with disability rider an asset worth considering.

What Exactly is a Rider?

A “rider,” which may also be known as an “endorsement,” adds more coverage to an existing policy. You must purchase a rider at the same time you buy your term life insurance policy. Riders modify an original policy and its provisions override anything in an original life insurance policy. For instance, if you buy a term life policy and there is any conflict between the provisions of the term life and the disability rider, the rules of the disability rider would take precedent.

Riders may also exclude or remove coverage from your term life policy, but in most cases it adds to it. It is best to contact a financial advisor for a term life with disability rider quote as prices may vary. Riders, of course, will add to the premium of a regular term life policy because you are benefiting from extra coverage.

Adding a disability rider to a term life insurance policy will pay the owner of such policy a pre-determined amount of income after the insured has been disabled for a specified amount of time. The waiting period varies from carrier to carrier. The waiting period is the time immediately after the insured is determined to have the disability in their claim. No benefits are paid during the waiting period so it is always best to have some kind of emergency “cushion” in your bank account to cover yourself while you are unable to earn an income.

An important factor to consider when you buy term life with a disability rider is that you may not purchase a face value amount more than the average income you have earned over the last two year period before your disability is determined. With this coverage, you will not be paid more than you were originally earning prior to your disability. You are not allowed to make more being disabled than you were earning in a completely healthy state.

Additionally, the disability with term life rider will only kick in after all of the other benefits for which you are eligible take affect. For example, you will first be paid by worker’s compensation, social security, lost wage policies and/or any other salary continuation plan of which you are eligible through your job. The disability rider will then compensate you for the remaining balance of what those other agencies do not pay equaling what your current average salary was over the last two years. You will have to check with your carrier as to how long your benefits will be in affect after you are determined disabled. Some carriers give you a two year limit of benefits and you may need to look into other options if you think you may need longer coverage.

Peace of Mind

Only you can determine if adding a disability rider to your term life insurance policy is worth the extra expense. If you rely on your body and your occupation is physically demanding, it may give you peace of mind knowing you have extra coverage in the event you should become disabled and unable to continue your employment.

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