Policy riders: Your policy, your way.
Policy riders provide a wide range of benefits and let you customize your coverage.
Stretch the value of your policy.Ever go out for pizza with a large group of people? One person prefers extra cheese, another wants mushrooms and olives; still another prefers pepperoni, onion, and peppers. No problem, right? The restaurant staff is more than happy to cater to everyone’s individual needs, and customers can customize to their heart’s content with toppings—generally for only a slight increase in price.
Believe it or not, the same holds true for a life insurance policy and the riders that can go with it. Similar to the toppings on your pizza, riders can help you customize your policy, adding to your coverage, and creating a policy designed to fit your specific needs. Please keep in mind that riders are only available through the purchase of a policy. Riders seek to enhance the usefulness of a policy to you, but the life insurance benefits of the policy are the main reasons to purchase the policy.
And, while there is never a “sale” on life insurance policies, riders can be a terrific way to stretch the value of your policy.
Just what is a policy rider?A rider is an addition to an insurance policy that is separate from the basic policy and provides additional benefits, usually at additional cost, although some are automatically included. Depending on the policy you choose, there are several riders available that provide a wide range of benefits and can help you meet your short- and long-term goals. For example, riders can help you lock in guaranteed1 insurance coverage down the road, or financially protect you in the event that you become disabled, or terminally ill. Other riders can guarantee more insurance for you in the future—or even for your spouse or children—without having to provide additional proof of good health. In short, policy riders provide you with the flexibility to meet your changing needs, and can grow along with you and your family—the toppings for your life insurance policy pizza. A New York Life Agent can help you sort through all the options and decide which, if any, life insurance policy and riders best fit your situation. Depending on your policy,2 some of the more common “additional toppings” might include:3
- Accidental Death Benefit: This rider provides an additional death benefit (equal to the face amount of the policy, up to a maximum of $300,000) if you die as result of an accidental injury, and within 12 months of the accident. The rider terminates automatically at age 70. The rider involves a monthly charge until the rider expires.
- Children’s Insurance: This rider provides level term insurance for your eligible children, which can later be upgraded to permanent insurance—up to five times the face amount of the term coverage. Insurance on each covered child ends on the earlier of the child’s age 25 or when the insured under the policy is or would have been 65. An upgrade to permanent insurance is available on the policy anniversary when the covered child is age 25, the insured is age 65, or when the child marries—whichever comes first. Please note: The Children’s Insurance rider is not available with Custom Whole Life policies. An additional cost for this rider applies until the rider expires.
- Chronic Care: This rider helps protect policyholders from the financial hardships of chronic care by providing tax-free access to a portion of their base policy benefits should they become permanently chronically ill. Monthly benefits can be selected for payment over 25, 50, or 100 months. The Chronic Care Rider is available on most Whole Life and Custom Whole Life policies at issue. (Note: the Chronic Care Rider is referred to as the Chronic Illness in California.) This rider is available for an additional cost and must be elected at issue of the policy.
- Disability Waiver of Premium: Should you become totally disabled (as explained in the policy) for six months or more before age 60 and through age 65, this rider waives your policy premiums through the maturity of the policy at age 100. This rider can be added after issue of the policy, with underwriting, and charges for the rider will vary by policy.
- Living Benefits Rider: Imagine you were diagnosed with a terminal illness and found to have a life expectancy of 12 months or less. This rider gives you access to a portion of your policy’s eligible death benefit during your lifetime, potentially giving you access to funds for critical medical treatments, or to help defray living expenses for your caregivers. You can request that this rider be added to your policy at any time.4 Various states have established different life expectancy periods once terminal illness is diagnosed. There are maximum benefit levels set for this rider. A charge is applied when the rider is exercised. Your agent can provide you with specific information.
- Spouse’s Paid-Up Insurance Purchase Option (SPPO):5 Should you die, this rider gives your spouse, provided he/she is the beneficiary of your policy (or family member in New York), the right to purchase a new paid-up life insurance policy on his or her life, without providing evidence of insurability. The benefits? The SPPO rider may serve to insure someone who is otherwise uninsurable and can be an effective estate planning tool by helping to protect beneficiaries and providing funds to help pay estate taxes after both individuals die. This rider is included in most New York Life policies at no additional cost. The rider has to be in effect at the time of the Insured’s death. The company will reduce the life insurance proceeds to pay the single premium for the paid-up insurance.
Finding the perfect fit
It’s important to understand these are only partial descriptions of some of our riders. Not all riders are available on all policies or in every state, and some states vary the terms of certain riders. Riders can give you the opportunity to extend or continue life insurance coverage, sometimes at critical times for you or your family.
Your New York Life agent can work with you—offering more information on specific riders available, and helping you choose which ones fit your needs best.
Don’t have an agent yet? Fill out our “Consult an Agent” form at the top of the page. We’ll have an agent in your local area contact you at your convenience for a free consultation.
In Oregon, the rider form numbers are as follows: Accidental Death Benefit: 208-200; Children’s Insurance: 208-247; Chronic Care Rider: ICC13-231-72; Disability Waiver of Premium: 208-225; Living Benefits: 206-496.27; and Spouse’s Paid-Up Insurance Purchase Option: 205-375.
1 The guarantees of any rider are based on the claims-paying ability of the issuer.
2 All of the riders listed (except for Chronic Care Rider) are available on Yearly Convertible Term and the Level Premium Convertible Term products, as well as Whole Life and Modified Premium Whole Life products. The Chronic Care Rider is only available on Whole life and Custom Whole Life products.
3 There are certain limitations and restrictions associated with the riders. Please consult a New York Life agent for additional information.
4 There is a cost to exercise this rider.
5 Rider Insured’s Paid-Up Insurance Purchase Option in New York.