A rider is a mechanism that amends the base policy to add, or sometimes limit, benefits. Although there are many optional riders available, including term riders, accidental death (double indemnity), spousal/child(ren) riders and accelerated death benefit riders, among many others, this essay will address only the waiver of premium and the guaranteed insurability riders.
The waiver of premium rider functions as a disability income policy, in that it provides a benefit (waives all premiums) if the insured becomes disabled. Although generally more restrictive than an individual disability income policy, it is useful in many circumstances.
The elimination (waiting) period is fixed (usually six months), and the inability to perform the insured’s occupation (own occ) is usually two years; after that, it is usually the inability to perform any job that the insured is qualified for by education, training, or experience.
For example, if the insured was a litigator and the disability left her unable to perform in the court room, but she could still function as an attorney, the premiums would only be waived for the later of the first two years or until she could function as an attorney.
The waived premiums are not a loan. The insurance company credits the policy as if each premium was actually paid. If the insured eventually returned to work, he would be responsible for paying future premiums, but would not indebted to the insurance company for any waived premiums.
Because cash flow can be tight during a period of disability, the waiver of premium rider can insure that the life insurance will not lapse at a critical time.
The guaranteed insurability rider allows for the purchase of a predetermined amount of life insurance every three years. Typically, the options begin at age 25 and end at age 43, but that can vary among different companies. If the predetermined amount was $100,000 and the policy was purchased prior to age 25, there would be the opportunity (but not the obligation) to purchase an additional $700,000 of insurance without providing evidence of insurability (no underwriting).
The predetermined amount is a maximum, and the full amount (or any amount) need not be purchased at every or any option date. Should the insured become uninsurable, this rider could prove to be invaluable.
Those are the only two riders that I recommend. In my opinion, the other riders either don’t provide enough benefit (accidental death – your beneficiaries need a certain amount of income irrespective of how you die) or should be procured with their own policy (spousal child(ren) insurance).