The Best Term Life Insurance for Caregivers: How to Protect Your Loved Ones

Life Insurance Riders Provide Additional Protection

Many life insurance policies offer options called riders, which can be added on to your existing policy or be purchased separately (depending on the rider type). These are important options to consider as a caregiver.

Here are five riders to consider:

Disability Income Rider

The disability income rider allows you to have your premium payments waived and grants you a supplementary income—usually based on the value of your policy—if you become disabled.

Insurance companies usually have limits on how much can be paid each month and for how long you can receive it.

Long-Term Care Rider

A long-term care rider offers a lump-sum benefit to help with costs if you develop severe cognitive impairment or are unable to perform two or more activities of daily living (ADL).

This money, which is deducted from your policy’s death benefit, can cover full-time home care or pay for your nursing home fees. The most that you can receive from this type of rider is a percentage of the face value of your policy.

Note: Long-term care riders are only available on permanent life insurance policies, not term life insurance policies.

Critical Illness Rider

A critical illness rider offers a lump-sum benefit to cover healthcare and other costs if you have a critical illness (such as cancer, kidney failure, end-stage lung disease, or other life-threatening condition). This payment is deducted from your death benefit.

Accelerated Death Benefit Rider

The accelerated death benefit rider pays out a portion of the death benefit if you are terminally ill. This rider is usually included with term life insurance policies at no cost. Benefit payouts are usually capped at $250,000 to $500,000.

Child Rider

If you have a child with a disability or special needs, look into adding a child rider onto your policy.

A child rider is the easiest way to obtain life insurance coverage for your child. While a death benefit is one aspect of what a child rider can offer, another benefit is that purchasing a child rider guarantees your children’s future insurability.

Not all life insurance companies will approve coverage on a child with a disability or special needs. But some life insurance companies won’t ask for medical information when applying for a child rider.

If you want to get a child rider for your child, be sure to tell your Quotacy agent upfront if your child has a disability or special needs. Your agent will make sure you apply to a company that offers a child rider with no medical information.

Regardless of the rider that you might be leaning towards, you’ll need a simple way to select the right term life policy to go along with it.

Your next step is to use our free quotes tool.

Applying for Life Insurance as a Caregiver

You’ll be able to compare term life insurance policies from the best life insurance companies side-by-side, select a policy, and apply in under five minutes. Before choosing a life insurance company to apply to, you’ll be shown the riders available for that specific company.

Once you’ve applied, our insurance agents will look at your application and advocate for you to make sure that you’ve got the best rate for the coverage that you need.

If your loved one is expected to outlive you, then you may want to consider permanent life insurance instead of term life insurance. Term life insurance is protection against the what-ifs. Permanent life insurance pays out a death benefit no matter when you die, as long as the premiums are paid.

The problem with permanent life insurance is that it’s much more expensive than term life insurance. Not all families can afford permanent life insurance. Talk with a Quotacy agent if you want to know more about your permanent life insurance options.

If your loved one has special needs or a disability and will need care for his or her entire life and are expected to outlive you, we recommend you work with a financial planner. Long-term financial planning in this scenario can be tricky to ensure your loved one doesn’t lose any government benefits.

Naming Beneficiaries on Your Policy

If you’re caring for someone who receives, or is expected to receive, means-tested government benefits such as Supplemental Security Income or Medicaid, it’s important not to name this person directly as a beneficiary of your policy.

“Means-tested” means that having any assets worth more than $2,000 would disqualify your loved one from receiving these benefits.

You can name the person who has agreed to be the guardian for your child, should you die, as beneficiary. But the best option is to create a trust and name the trust beneficiary. Learn more here: Providing for a Loved One with Special Needs

As a caregiver, you have extra responsibilities that you have to think about in addition to your personal obligations. Let us help you find the best life insurance for your family’s needs. In just a few minutes, you can make your loved one’s future more secure.

» Compare: Term life insurance quotes for caregivers