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  • Writer's pictureAneisha LeMonier

Horses Keep You Stable


When Riding a Horse, We Borrow Freedom ~ Helen Thomson


When I started my classes learning about life insurance, and all the different riders that can ride along with a life insurance policy, I had in my mind a vision of a team of horses. Each one different, but designed to pull the cart/wagon forward with more power to its final destination. Maybe my analogy would be helpful to you, the person looking to purchase life insurance and the various riders which can be selected.


The different life policies (Term, Whole life [permanent cash value policies],Universal Life Index and Graded Death Benefit) are just some that are common to most people needing to choose a policy.


Horse #1 - ACCELERATED DEATH BENEFIT RIDER FOR TERMINAL ILLNESS

The power of this horse/rider is that it provides the policy owner access to a portion of the death benefit of the insurance policy. There is no monthly charge for this rider, but when it is exercised, the benefit is paid out but minus an administration fee. This rider is available ANYTIME after the policy is issued when the policy is $50,000 and higher.


Horse #2 - ACCIDENTAL DEATH BENEFIT RIDER

The unexpected happens and accidents occur. That is what this rider will help with. If the policyholder passes away from a covered accident, this rider provides a benefit amount on top of the face value of the policy. This horse only runs until age 70, and it has a small monthly fee to add this to your life policy.


Horse #3 - AUTOMATIC INCREASE BENEFIT RIDER

This horse helps your policy keep pace with inflation. A definite plus if you are buying a policy young. This rider provides an automatic annual increase in the face amount of your policy. Automatic increase does have some guidelines and is only available on certain index policies.


Horse #4 - CHARITABLE GIVING RIDER

This is one where the phrase, "don't look a gift horse in the mouth" comes to mind! This rider can pay a Charitable Death Amount to a qualified charitable organization that is exempt from federal taxation (think 501(c)(3). This is also separate from the death benefit amount that would go to a beneficiary listed on the policy


Horse #5 - CHRONIC ILLNESS ACCELERATED DEATH BENEFIT RIDER

Adding this horse to your team can take you through some rough patches. This rider allows the policy owner the option of accessing a portion of the death benefit of the life insurance policy if the insured is permanently unable to perform two of the six activities of daily living (Here's a link to those https://www.elderlawanswers.com/activities-of-daily-living-measure-the-need-for-long-term-care-assistance-15395 )


There is no monthly charge for this rider. It will reduce the death benefit since it is being accessed for the care of the insured.


Horse #6 - GUARANTEED INSURABILITY BENEFIT RIDER

Think of "getting back on the horse after a bad fall." Let's say you are the insured and you have an active policy. Maybe it matures, or maybe you have need of a different type of policy. But, while you were insured, you were diagnosed with some type of disease or illness that would prevent you from being insurable. This rider says that if you purchase a new policy within the guidelines, you can be insured without an evidence of insurability. This rider can only be added at the issuance of the policy. There are some restrictions.


Horse #7 - WAIVER OF PREMIUM RIDER

Because this horse is very important, and valuable, I am going to quote from Farmers Life product information: "This rider provides that the monthly premiums (including the cost of any attached riders) will be waived if the insured becomes totally disabled due to a qualified disability. After six consecutive months of disability, these monthly premiums will be waived from the date of such disability and for its duration, unless the disability begins at age 60 or later, in which case the benefit will stop at age 65 at the latest. Disability must start before age 65. The premiums for this rider are payable to age 65. This rider is only available at issue."


Horse #8 - OWNER WAIVER OF PREMIUM RIDER

There are some life insurance products, one's that have cash accumulation accounts, that have monthly deductions. These deductions (including the cost of any attached riders) from the Accumulation Account will be waived after the original policy owner’s death or during his or her total disability, or until the juvenile insured turns age 25, if the or if a disability starts before age 60 and lasts at least six consecutive months. Monthly deductions for this rider will be deducted from the Accumulation Account until the juvenile insured’s age 25. This rider is only available at issue


Horse #9 - CHILDREN'S TERM INSURANCE RIDER

This is when parent's should "pony up" and include their child's life protection on their term insurance. The rider is available at issue or any time up to two years after the birth or legal adoption of the firs child or upon legal guardianship. You can add the amounts in $1000 units. The child is covered up to the age of 22 regardless of marital status too. This can be converted to their own policy as an adult with guaranteed insurability.


Now, with all this information on riders, "wild horses" shouldn't keep you away from calling me and making sure you have a team of horses ready for you and your family!

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