What other life insurance benefits can be added to my policy?

There are a number of insurance benefits that provide additional protection to the policyholder. These are usually attached to the life insurance policy and require the payment of an additional premium.

Guaranteed Purchase Option

Insurance companies allow younger insureds (usually between 25 and 40) who can't afford the high premiums of a policy with a large face amount, to purchase extra insurance without proof of insurability. Insurers offer the policyholders in this age group new insurance benefits every three years, or upon the occurrence of critical life events, such as marriage or the birth of a child. The amount of additional insurance is typically equal to or less than the face amount of the policy.

Waiver of Premium Provision

The waiver-of-premium provision is automatically included in some policies. Under this provision, if the insured becomes totally disabled from physical injury or disease, all their premiums are waived. For your premium to be waived, you need to meet a number of requirements: be younger than a stated age, usually 60 or 65; be disabled for at least six months; provide evidence of disability and satisfy the policy provision's definition of disability.

Accidental Death Benefit Rider

Also referred to as "double indemnity", this rider allows the beneficiary of a policy to collect double or triple the face amount of life insurance if the insured died as a result of an accident. The majority of financial advisers object to the double indemnity rider and usually recommend purchasing additional life insurance instead.

Cost of Living Rider

The policyholder can purchase one-year term insurance without any proof of insurability. The amount of the term insurance changes every year, reflecting the change in the consumer price index (CPI). Insurers usually delimit the amount that can be purchased every year to a maximum of 10 per cent of the face value.

Accelerated Death Benefit Rider

This benefit option, also called "living benefits rider", allows insureds who are terminally ill, who suffer from a catastrophic disease or require long-term care, to collect their life insurance benefits before they die, in order to meet their medical and hospital expenses.

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