What Is A Spouse Rider On Life Insurance Policy?

A rider is something that you are able to add on to your life insurance policy that can provide additional benefits or coverage depending on what the rider covers. With a Spouse Rider On Life Insurance Policy, you and your spouse will both have coverage under the same policy. These riders basically cover both of you instead of having to purchase two different policies.

For example, there are accidental death riders that will pay out a larger portion than the face amount.

There are child riders that will pay out if something were to happen to your child to help cover funeral costs, but children riders are a little different because they don’t require as much life insurance coverage.

Spousal riders are similar to child riders in that the insured, say for example the husband, would receive some type of economic benefit if his spouse were to die before him.

Spousal riders are more commonly added on to help out with burial costs. The average funeral can cost around $10,000, which can be difficult for a grieving spouse to pay for due to the loss of income.

Do Spouse Rider On Life Insurance Policy Still Exist?

As time has gone on, spousal riders have become less and less prominent as insurance companies have pushed more for the spouse to take out their own policy. Recently,  I had a 59-year-old male who is looking to lock in a $100,000 15-year policy. His previous policy was expiring and it had a $10,000 spousal rider that he was hoping to replace.

Upon doing further research, I found that there are some life insurance companies that do offer the spousal rider. I was then surprised to learn that there were only a few options available.

The few companies that I found that offer a spousal rider were United of Omaha, Nationwide and Lincoln Benefit Life. The important thing for the client’s case is that none of them offered the coverage he was seeking. For example:

  • United of Omaha offers a spousal rider, but the minimum coverage for the spouse is $100,000.
  • Nationwide requires a minimum face amount of $125,000 for the insured and then the minimal spousal coverage of $25,000 for the spouse.
  • Lincoln Benefit Life is similar to United of Omaha but it only required $50,000 of spousal coverage.

Upon running a few more quotes, I found out for this gentleman’s case the Lincoln Benefit Life was the cheapest option at $140.88 per month.

Spousal Rider Vs. Individual Life Policy

Thinking that the spousal rider option was too expensive, I then ran some quotes for an individual policy for the husband and a final expense policy for his wife.  The cost of a 15-year, $100,000 basic term policy of $48.56 per month plus a $10,000 final expense policy for his wife, which was $57.27 per month, a total premium for both is only $106.03, about $34 difference than doing the life insurance policy with the spousal rider.

Purchasing the term policy with a spousal rider didn’t make much sense here compared to buying the two separate policies.

Are Spousal Riders Worth the Cost?

If you are still considering having a spousal rider and as long as your spouse is in good health, a separate term life insurance policy may be the most beneficial option. Your spouse’s risk class and age may have an impact on how much your premium policy will end up costing and just like when you buy another life insurance policy, the company will require that your spouse take a medical exam, which may impact how much you pay for the rider.

The most substantial disadvantage to a spousal rider is losing coverage. For example, if the primary insured individual was to pass away, the rider no longer will be in effect, in which the spouse would have to find more coverage and could be extremely costly. In a similar situation, if the marriage ends through a divorce, the rider will not cover the spouse and they will be back to where they began.

This is why purchasing life insurance coverage for both spouses ensures that the individuals are covered regardless of death or divorce, and they will continue to be covered. While there are some situations where spousal riders are worth more money than when you buy separate term policies, these situations are few and far between. In most cases, the spouse term rider will not save you much money on monthly premiums and most applicants are amazed at how affordable a life insurance policy can be for their spouse.

Overall, obtaining a spousal rider is not deemed as beneficial as they once were. With spousal riders, you will have a considerably low amount of options, while with term life insurance policies you can have hundreds of options. The more options that are available for you, the more likely you will locate the most advantageous coverage for yourself.

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How Much Coverage Do My Spouse and I Need?

Regardless of whether you choose a rider or a separate policy, it is extremely important to ensure that you have enough coverage for you and your family. If you are seeking an additional policy or a rider, or it has been a while since you have looked at your insurance policy, it may be time to ensure that everything within your coverage is in place.

You and your husband/wife should sit down and discuss what you believe to be the most beneficial option for you two and decide what forms of life insurance are needed for you. This is conducted through calculating all of your loans/debts, considering how many people rely on your income if both of you work, would one of you be able to live off of a single income, and various other factors. All of these factors are essential to consider when trying to locate the most advantageous coverage for you and your loved ones.

This is because every year that are hundreds of spouses that are suffering through the grief of losing their spouse and ultimately find themselves dealing with bills that they are unable to pay. Avoid allowing your spouse from becoming one of these stories and talk to a life insurance agent and have them aid in locating the most beneficial life insurance coverage for you and your family.

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