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Understand The Benefit and Riders of Universal Life Insurance
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UL plans are unbundled, the various components of the plan such as insurance charges and earned interest can each be isolated and quantified. Consequently, they are much easier to understand and explain than traditional bundle permanent life insurance products. In this article, we will discuss the benefits and riders in the universal life policy.
Many of the riders and benefits available for traditional whole life and term plans are also available on UL plans. Quite often the costs for these riders and benefits are paid from the accumulating fund of the UL plan.
1. Term riders
Term riders are additional inexpensive term insurances added by policy holder to the UL policy. They are inexpensive insurances protection for anyone insured by a UL plan. They can also provide the insured lives with additional investment room within a UL plan for exempt testing purposes at a reasonable cost.
2. Child term riders
Child term riders are an efficient, low-cost way of providing small amounts of life coverage on children, within the UL plan. Many child term riders provide conversion privileges that enable the child to purchase larger amounts of permanent coverage when they reach a certain age with or without insurability.
3. Waiver of premium
Should the plan owner become disabled, the waiver of premium rider pays a specified amount into the plan to cover the cost of insurance.
4. Accidental death benefit
The accidental death benefit pays an additional amount of insurance to the beneficiary, if the insured dies as a result of an accident or dismembered in an accident.
5.Critical illness
The critical illness rider pays a benefit to the insured who are stricken by a critical illness. The rider outlines the illnesses that are covered.
6. Long term care rider
Long term care riders pays for institutional or home care costs for the insured due to illness or injury.
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