A life insurance “rider” is a provision to an insurance policy that adds additional benefits for an additional cost. Most life insurance comes with a Terminal Illness Rider built into the policy.
This rider can typically be triggered when the insured is diagnosed with a terminal illness and given a life expectancy of less than 12 months. The policy owner is then able to use part of the death benefit, usually less than 75%, to help cover the medical costs. Life insurance death benefits typically receive tax-free treatment when paid to the beneficiaries, and the Terminal Illness Rider generally receives this favorable tax treatment. However, you should consult a tax professional before making such decisions.
The Terminal Illness Rider is just one reason why everyone should consider purchasing a life insurance policy.
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