Living And Death Benefit Riders
What Does Living And Death Benefit Riders Mean?
Living and death benefit riders are add-ons to standard insurance policies or annuity contracts that offer additional benefits. To take advantage of these riders, the policyholder typically pays an extra fee on top of the standard premium for the primary coverage or annuity. These riders are commonly added to life insurance policies.
Insuranceopedia Explains Living And Death Benefit Riders
Most policies offer either living benefits or death benefits. In the case of annuities, the benefit is a living benefit, which is paid to the annuitant during their lifetime and stops upon their death.
In contrast, life insurance policies typically do not pay anything to the insured during their lifetime (unless there is an investment component attached) and only provide a death benefit to the beneficiaries after the insured’s death.
Living and death benefit riders modify these policies to provide both benefits—paying during the insured’s lifetime and after their death. Essentially, these riders add a death benefit to an annuity and a living benefit to a life insurance policy.
These additional benefits are usually triggered by special circumstances. For example, an annuity with a death benefit rider might only pay a death benefit to the insured’s beneficiary if the insured dies early due to an accident. Similarly, a life insurance policy with a living benefit rider may allow the insured to access a portion of their death benefit while still alive to cover critical medical expenses.
