Restoration of benefits rider
This important rider can help protect the value of the life coverage when paired with a long-term care rider. It restores the death benefit on a monthly basis when long-term care benefits are paid. So instead of the long-term care benefits gradually depleting the value of the life coverage, the full face amount is available should the insured die during the time he or she is receiving long-term care payments. This rider stays in effect until the base policy is terminated, the full death benefit has been restored or the long-term care benefit rider is terminated.
Spouse term rider
This rider allows an employee who purchases a UL insurance policy to add coverage for a spouse without buying a separate spouse policy. Typically, the spouse doesn’t even have to be present at the enrollment to sign the application, making this coverage very convenient to buy at the worksite. This kind of coverage makes sense when the family wants additional protection for a certain period of time, such as until the home mortgage is paid off or the children are out of school and on their own. The rider also typically can be converted to a cash value plan later, without evidence of insurability.
Children’s term rider
A children’s term rider can usually be added to an employee’s UL insurance policy with no health questions for children ages two weeks to 18 years, with coverage staying in effect until age 25. At that point, the child typically can convert the rider to a cash value policy without evidence of insurability. This means if the child develops a health condition that might limit his or her ability to get coverage as an adult, the protection is already in place. Be sure to ask what happens if the employee dies while eligible children are covered by the rider. For example, Colonial Life’s plan provides a paid-up policy for the children until age 25. We find the children’s term rider to be twice as popular as the spouse term rider.
Guaranteed purchase option rider
This rider allows the employee to purchase additional coverage without evidence of insurability at specified dates, such as the second, fifth and eighth policy anniversary dates, or when a specified life event, such as a birth or marriage, occurs. It’s a great option for employees who know they’ll need to increase their amount of coverage later. For example, a recently married employee might anticipate starting a family in the next five years and need additional coverage at that time. The guaranteed purchase option rider makes that convenient and affordable, even if the employee’s health status changes during that time.
Accidental death benefit rider
This rider pays an additional death benefit if the insured dies as a result of an accident before age 70 — in effect, doubling the amount of coverage. It’s a less expensive way to increase the death benefit for those who don’t qualify for or can’t afford more coverage. If your clients have a younger employee base, this rider is worth looking at, since younger people are more likely to suffer accidents. For example, drivers under age 25 are much more likely to be involved in a fatal car accident than older drivers.2 Some riders include extra benefits for accidental death while a passenger on public transportation or while wearing a seat belt.
If the life has gone out of your sales lately, take a new look at the riders available with today’s universal life plans. Look for a carrier that offers a wide variety of riders on its plans so you have many options to help your clients and their employees customize their coverage. Universal life can be more complicated to explain and sell than other types of life insurance, but with even more flexibility thanks to riders, it just might rescue your bottom line.
Jeff Koll is assistant vice president of life and disability products for Colonial Life Accident Insurance Company. He can be reached at (803) 678-5456 or [email protected]. Colonial Life is a market leader in providing insurance benefits for employees and their families through the workplace, offering disability, life and supplemental accident and health insurance policies in 49 states and the District of Columbia. Colonial Life is based in Columbia, S.C., and is a subsidiary of Unum Group, one of the world’s leading providers of employee benefits. For more information visit www.coloniallife.com.
Footnotes
1 CareerBuilder.com, “More Than One-Third of Workers Will Put Their Tax Refund Into Savings, Finds New CareerBuilder Survey,” April 12, 2011.
2 National Safety Council, Injury Facts, “Licensed Drivers and Number in Accidents by Age: 2009,” as reported by the U.S. Census Bureau, 2012.
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