Life insurance is one of those things no one really enjoys thinking about, often because they don’t understand it and the value it offers to their loved ones’ future financial security. Yet, that’s just one of the reasons it’s critically important — especially for military servicemembers — to think ahead and put the appropriate amount of protection in place now. Life insurance can offer your family and other beneficiaries financial peace of mind when the worst happens.

But sometimes life insurance alone isn’t enough. A lot can happen in the course of your life, and you or your family may incur unexpected expenses. That’s where life insurance riders come in. 

What Is a Life Insurance Rider?

Life insurance riders are customizable add-ons for your policy. They give you extra benefits and flexibility that your basic policy might not have. Adding riders can increase your premium, but they’re often worth it for the additional peace of mind they provide.

Riders work by adjusting the terms of your policy. If you meet the requirements of a rider while it's active, you can file a claim with your insurer to access its benefits. Some insurance companies automatically include certain riders on their policies, while others let you add them when you're shopping for life insurance. Keep in mind that not all insurance companies offer the same riders, and some may only be available with specific types of life insurance.

Benefits of Adding Riders to Your Policy 

Life insurance can be a long-term strategy for securing your family’s finances, and a lot can change from the time you purchase your policy to the time your family makes a claim — especially for military families and Veterans. Your family might grow, your health outlook could change, or you might not be able to work someday. Riders add the flexibility and extra financial protection you need to help cover those changes.

Common Types of Life Insurance Riders 

While many types of life insurance riders may be suitable for you, here are the three most common: 

1. Waiver of Premium Rider

A waiver of premium rider allows you to stop paying premiums if you get seriously ill or have a significant physical issue. It's a way to keep your policy active even if you can't afford the payments anymore. People often add this rider to their life insurance for extra protection, but it's only available when you first purchase your policy. Your insurer might add it to your premium or charge a separate fee upfront, which increases the overall policy cost. How much it costs, how long you wait to claim benefits, and what it covers all vary between insurance companies.

2. Accidental Death Benefit Rider

An accidental death benefit rider adds extra money to your life insurance payout if you die due to an accident. It may also cover you if you die from accident-related injuries within a set timeframe (e.g.,  90 or 180 days). This bonus payout is often called "double indemnity" or "triple indemnity" because it can be double or triple the average amount your beneficiaries would receive if you died naturally.

This rider comes standard in various types of life insurance, such as term or permanent policies. It's not the same as accidental death and dismemberment (AD&D) riders, which pay out for surviving accidents or experiencing serious injuries such as losing a limb, blindness, or paralysis.

3. Critical Illness Rider 

This rider gives you access to your death benefit if you’re diagnosed with serious illnesses such as:

• Cancer
• Heart attack
• Heart valve replacement
• Kidney failure
• Major organ transplant
• Paralysis
• Stroke
• Sudden cardiac arrest

As long as you meet the policy minimum, you can typically make one claim per year and per qualifying condition from the same event. Every policy is different, so be sure to consult your policy documentation for the specific details of your policy rider.

To activate a critical illness rider, you'll need to prove your serious health condition to your insurer. Once approved, you can access a portion of your policy's death benefit up to a set amount. Usually, you'll receive this as a lump sum, though some insurers may offer staggered payments. You can often use the money to pay for medical bills, daily expenses,  home care, and more, depending on the terms of your specific rider.

Note that although this rider gives you extra money when you're dealing with medical costs and cannot work, it lowers your death benefit.

Specialized Riders and Options 

Although these riders may be less common, they should be considered by servicemembers, especially those with children or other dependents. 

Long-Term Care (LTC) Rider or Settlement Option

A long-term care rider is a living benefit added to your life insurance policy. It lets you use part of the policy's death benefit each month for long-term care costs. To use this rider, a medical provider must confirm you can't do at least two daily activities alone or need a lot of supervision due to a cognitive issue (e.g., Alzheimer's).

To get this rider, you must be chronically ill and have a care plan with records. Many insurers have a 90-day waiting period, so you can only start receiving monthly payouts, usually a percentage of your death benefit, after that time. The exact amount varies but is often between 1% to 4%.

Term Conversion Rider

This rider allows you to switch a term life insurance policy to a whole life policy for a set time. No medical exam is needed. This gives you the flexibility to choose permanent coverage later without more exams. If your health worsens, converting your policy may be the best way to secure the death benefit for your family.

When you first get a term life policy with a conversion rider, it covers you for a set period (i.e., 10, 20, or 30 years). Not all term policies offer this conversion option, so check the terms of your specific policy to be sure.

You can decide to convert your policy due to changes in your health, or financial situation, or for other personal reasons. There's usually a deadline for converting, often before the term ends or before a certain age.

Child Term Rider 

A child rider adds coverage to your life insurance for your kids. If they die, it pays out a death benefit, easing your financial worries during a tough time.

Your child usually qualifies if they're between 15 days and 18 years old. The coverage often lasts until their 25th birthday or your 65th, whichever comes first. When the policy ends, your child can sometimes convert this rider to their own policy without a medical exam.

Life insurance payouts are tax-free and can be used for anything. Child riders don't cost much, and they're usually the same price, no matter how many kids are covered. They can be less expensive than individual life insurance policies for each child, however, the coverage amount is usually very small and typically would only be enough to cover funeral expenses.

Choosing the Right Riders for Your Life Insurance Policy 

Military families face challenges that make their needs and priorities different from civilian families. Choosing the right riders for your life insurance policy is important. Some tips to get you started include:

• Assess Your Insurance Needs: Ensure that the riders you choose address your specific concerns.
• Cost Considerations: Analyze the cost implications of adding various riders to a life insurance policy and how to balance that cost with potential benefits.
• Consult with Insurance Professionals: A qualified insurance professional can help you make informed decisions about adding riders to a life insurance policy.
• Understand How the Rider Works: Make sure you understand the rider’s waiting periods and payout circumstances.

Get the Right Coverage with AAFMAA

AAFMAA offers insurance policies designed specifically to meet the needs of military families. We’re proud to serve our nation’s servicemembers, their families, and Veterans from all branches. Check out our comprehensive military life insurance tools to find your best options. 

Contact us today to speak with one of our caring and knowledgeable experts about the benefits of AAFMAA Membership, including a broad range of life insurance options.