Question

A couple in their 40's, they have universal life insurance of $50,000 value, If they were going to purchase additional life insurance what type of policy, what face value, and what riders would be most appropriate given their age and need?

Answer 1

An ideal life insurance cover amount should be decided considering the annual income of the policy holder, rate of interest, premium payment term, habits etc. Riders are additionally paid features offerrred by Insurance company to increase the scope of life insurance policy's base coverage. Additional riders which can be availed are -

a. Permanent disability - A permanent disability as a result of any accident/mishaap/disease can lead to policy holder being out of work, a plain life insurance cover does not include the loss of income arising due breadwinners disability leading to loss of income.h

b. Critical Illness rider - A critical illness like AIDS, EBOLA, Cancer can lead to severe pressure on income & cash resources of the breadwinner & of the family which leaves the family in debts. Opting this rider insurance company pays the policyholder on diagnosis of Critical illness for his/her future expenses.

c. Accidental Death Benefit rider - Accidental death can lead to death either on spot/after some days of hospitalisation this cover pays the rider benefit.

d. Waiver of Premium - In case of a vanilla life insurance plan, if the life insured suffers any disability because of which he/she is unable to pay further premiums, opting this rider in case of permanent disabiliity, further premiums are waived by the insurance company and policy cover continues.

e. Accelerated Death Benefit Rider - In case policy holder is diagnosed with such a disease which shortens the life span of policyholder this rider pays to policy holder part of sum assured in advance which can be used towards expenses on treatment of diseases.