Most life insurance companies in Canada allow the insured to add riders to their life insurance policies. Adding a rider to a policy versus taking out a separate policy can mean substantial savings for the insured.
The reason for this is that life insurance policies have a built-in policy fee that covers the administration of the policy. This fee is hidden to the consumer because it is built into the premium, but it is nonetheless secretly added to each and every policy in Canada. Policy fees generally range from $60.00 a year to $120.00 a year. However, by adding a rider to the policy, the insured guarantees that they only pay this fee once, which translates to substantial savings over the life of the policy.
Examples of policy riders include the following:
1. Multiple Life Insurance Coverages on One Client – Some policies allow the insured to add multiple coverages to the same insured on one policy so they can split their coverage into two different styles. For example, they can customize their plan so that part of it is at a level cost, while the other part could be 10, 20, or 30 year term insurance.
2. A Spousal Rider – Many life insurance policies allow the primary insured to add a second life insured to the policy. Some companies allow up to five insured customers under a single policy fee.
3. Critical Illness Riders – A number of life insurance policies allows the primary insured to add a Critical Illness rider on themselves or a spouse.
4. Disability Insurance Riders – A few life insurance policies allow the insured to add a disability insurance rider to the policy. Don’t mistake this as a Disability Waiver Benefit because the Disability Waiver simply waives the insured’s life insurance premium, while a disability insurance rider replaces a portion of the insured income.
5. A Child Life Insurance or Child Critical Illness Rider – Almost all insurance companies allow the applicant to add a child life insurance rider with coverage ranging anywhere from $5,000 to $50,000; yet only a handful of companies — among them, Empire Life — allows the primary insurer to add a children’s critical illness insurance rider, which pays out a lump sum if one of the insured’s children is diagnosed with a covered Critical Illness.
For more details on life insurance in Canada, please contact us at 1-866-899-4849, or visit our Life Insurance Instant Quote Page.
