Are there certain life insurance riders that should be considered for disabled people?
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Asked September 9, 2013
One thing you should definitely look into is a payment of premium clause. This is a special rider available through some insurance companies that use a small increase in your premiums to set aside funds to pay the premiums later if you are forced to miss one or more. A payment of premium clause is basically an insurance policy for your life insurance policy.
In addition to a payment of premiums rider, you might also look into picking up a separate disability insurance plan. If you depend on your income to pay bills such as your life insurance premiums, then disability insurance could be used to pay the bills if your disability forces you out of work. The problem with disability insurance is that certain preexisting conditions may be excluded from coverage, along with the symptoms and side-effects associated with them.
The type of policy you buy might be important, as well. Term life policies tend to offer fewer long-range benefits, for example. Additionally, your disability may make you ineligible for a whole life plan later, but you may still be able to qualify now. Whole life, Universal life, and variable life insurance policies are all variations of permanent life insurance and all include a cash value that is accrued over time.
Similarly, if you are having trouble getting a life insurance policy because of your disability, you might be limited to something such as a funeral expense policy. This type of permanent life insurance does not accrue a cash value or pay out to the beneficiaries of your choice. Instead, it pays directly to a funeral director who applies the money to your funeral, burial plot, or cremation costs. Final expense insurance is much less expensive than other types of permanent life, but it is lacking in flexibility.
Answered September 9, 2013 by Anonymous