Possessing the option to purchase a so-called spouse rider was historically a frequent component of purchasing a term life insurance policy.
A rider is something you may add to your life insurance policy that, depending on what it covers, may offer extra benefits or coverage. You and your spouse will both be covered by the same insurance if you add a spouse rider. In essence, these riders provide coverage for both of you rather than requiring you to buy two separate policies.
There are accidental death riders, for instance, that will pay out more than the face value.
Child riders are a little different than adult riders in that they don’t require as much life insurance coverage, but they still pay out if something were to happen to your child to aid with funeral expenses.
Similar to kid riders, spousal riders provide a financial benefit to the insured, in this case the husband, should his spouse pass away before him.
More frequently, riders for the spouse are included to help with funeral expenses. A bereaved spouse may find it challenging to pay the $10,000 average funeral expense because of the loss of income.
Do Spousal Riders On Insurance Policies Still Exist?
As insurance firms have pushed more for the spouse to get their own coverage, spousal riders have diminished in popularity over time. A 59-year-old man recently approached me about locking in a $100,000, 15-year policy. He wanted to update his old insurance because it had a $10,000 spousal rider and was about to expire.
Further investigation revealed that some life insurance providers do provide spousal riders. I was then shocked to see that there weren’t many choices.
Only a handful of firms, including United of Omaha, Nationwide, and Lincoln Benefit Life, provide a spousal rider. In the client’s case, it’s crucial to note that none of them provided the coverage he was looking for. For instance,
- United of Omaha offers a spousal rider, but the spouse must have at least $100,000 in coverage.
- Nationwide mandates that the insured have a minimum face amount of $125,000 and that the spouse has a minimum spousal coverage of $25,000.
- Similar to United of Omaha, Lincoln Benefit Life simply required $50,000 of spousal coverage.
After getting a few more quotes, I discovered that the Lincoln Benefit Life was the most affordable choice for this client, coming in at just $140.88 per month.
Spousal Rider Vs. Individual Life Policy
I then got quotations for the husband’s individual policy and the wife’s final expenditure insurance because I believed the spousal rider option to be too pricey. A 15-year, $100,000 standard term policy would cost $48.56 per month, and a $10,000 final expenditure coverage for his wife would cost $57.27 per month. This would cost a total of $106.03 in premiums, saving $34 compared to purchasing a life insurance policy with a spousal rider.
Here, buying the term policy with a spousal rider didn’t make as much sense as buying the two policies separately.
Are Spousal Riders Worth It?
If you want a spousal rider, I would suggest getting a separate term policy as long as your husband is healthy. Do keep in mind that the risk category and age of your spouse will also affect the final cost of your premium coverage. The firm will ask your spouse to complete a medical exam, just like when purchasing another life insurance policy, and the results could have a significant impact on the cost of the rider.
Losing coverage is a spousal rider’s major drawback. The rider is void in the event of the death of the primary insured party. At this point, the spouse would need to acquire additional coverage, which would probably be more expensive than if they had first purchased a term policy. The rider won’t cover the spouse if the marriage ends in divorce, and they will be forced to start over.
Purchasing a separate policy will provide coverage for both spouses regardless of which one passes away, and because the policy is in each spouse’s name, if there was ever a divorce, both would continue to be covered by life insurance. Spousal riders could be more cost-effective in some circumstances than purchasing a separate term policy for your spouse, but these are uncommon. In most circumstances, the rider won’t reduce your monthly premiums by much (if at all). The majority of applicants are shocked to learn how inexpensive a life insurance policy for their spouse may be.
You will have a lot fewer possibilities because these riders are becoming less popular, whereas you would have hundreds of options for a term life insurance policy. The more options you have, the greater your chances are of finding coverage at a lower cost.
Almost always, purchasing a separate policy is preferable to adding a rider to your existing one. Even though having just one insurance and one premium to pay is simpler, it might not provide you with the coverage you need at the most affordable price. Whichever route you choose, we’ll be pleased to find you and your spouse the greatest coverage at a price you can afford.
How much coverage do you and your spouse need?
Whether you decide to buy a rider or a separate policy, it’s crucial that you have enough protection for yourself and your family. It’s important to reevaluate your needs to make sure you’re covered in the event of a disaster, especially if you’re considering buying an additional policy or rider if it has been some time since you last looked at your insurance options.
You should talk with your partner about all of the debts you would both leave behind if either of you were to pass away. Your overall debt is a fantastic place to start when determining how much life insurance you need by adding up your mortgage, automobile, credit card, and other payments.
How many people depend on your wages and how much income would be lost if one of you passed away are other factors that you should both take into account. Do you both have jobs? Could one partner support themselves with just one income? Do your kids depend on your income? Your requirement for life insurance will be impacted by all of these variables.
Every year, there are spouses who are grieving the loss of their partner while also having to deal with enormous bills that they are unable to pay. Don’t let your marriage end up like one of these tales. The money people require to get through the challenging period without adding to their financial troubles is provided by life insurance.
You might spend hours on the phone or doing research on several providers to find the finest policy if you want to obtain the best coverage for the lowest life insurance prices. We can avoid you having to spend hours on the phone with the same questions. By completing the quote form on the side, you will receive offers from businesses with the best ratings at the lowest prices.