In this article we will look at the AICPA life insurance riders offered through their group plans. Are they a good value and worth adding to your policy? We will examine these riders and help you make a decision.
Sometimes selecting a life insurance policy is rather simple. If you are in excellent health and one top-rated carrier has significantly better rates than other carriers, the choice is simple. You can see sample AICPA life rate comparisons here.
For instant life insurance quotes, please use the quote engine on this page.
Other times, your decision can be more involved. When all else is equal – premiums, financial ratings, etc. – then it’s important to look at the riders. Life insurance riders vary among carriers and policies, so it makes sense to compare them. Even if you have selected a policy, then it’s a good idea to evaluate the optional benefits.
Riders are optional benefits that require additional premium. Occasionally, there is a “no-cost” rider, but that is usually considered a policy provision.
AICPA Life Insurance Riders
- Optional Disability Waiver
- Accidental Death and Dismemberment (AD&D) Coverage
- Optional Dependent Child Coverage (only with the CPA Life and GVUL Plans)
- Accelerated Death Benefit for Terminal Illness – Available at no cost
We will look at the merits of each rider:
Optional Disability Waiver
This rider is available with all of the AICPA life plans. This optional benefit allows you to continue your coverage without making premium (contribution) payments in the event of your total disability.
A “total disability” means that you can’t perform the duties of any occupation. According to the AICPA, your coverage is
extended at no cost after a nine month waiting period from the date you became disabled or when proof of disability is provided–whichever is later–and for subsequent years with periodic proof of your continued total disability.
This optional rider can only be exercised if you become disabled before the age of 60. The benefit ends at the age of 75 and doesn’t apply towards the AD&D benefit (which we will look at next).
Is this Optional Disability Waiver worth the extra cost?
If you do not have an adequate disability insurance policy, then it is usually a good idea to add this rider. If you have good disability coverage, then it might not be worth the extra cost. The additional premium varies, depending on plan type, gender, age, and health.
Accidental Death and Dismemberment (AD&D) Coverage
This rider doubles your life insurance benefit if you die due to an accident.
The “dismemberment” part of AD&D coverage only pays if you:
- suffer the loss of both hands, both feet, sight in both eyes
- suffer the loss of one hand and one foot, one hand and sight in one eye, or one foot and sight in one eye
According to the AICPA,
One-half the amount is payable for the loss of one hand, one foot or sight in one eye. The total payment for any accident will not exceed the full amount of the AD&D insurance.
As you see from the chart below taken from the Live Science website (http://www.livescience.com/3780-odds-dying.html), a very small percentage of deaths occur due to accidents. The most recent data, from three years ago in 2014, shows that 5% of deaths are caused by accidents. For this reason, AD&D premiums are relatively low.
Is the AD&D rider worth the extra cost?
In general, this type of rider can make good sense. If you’re in excellent health, the chances of dying due to an accident are greater than 5%. The cost for someone between the ages of 18-64 is .20 per $10,000 of death benefit. This is not a steep price to pay. AD&D riders can vary greatly in premium, so it’s worth checking the additional cost.
Optional Dependent Child Coverage
This benefit is available on both the CPA Term (increasing term) and GVUL plans. Although on the AICPA site, it says that it’s only available on the CPA Term. Out of all the riders, this is probably the most popular. A lot of people don’t want to purchase a stand-alone policy for their children, so adding some coverage as a rider is a more affordable option.
The premium is $6 per year and it allows you to cover all your eligible children with a $10,000 life insurance benefit. The cost of this rider is deducted from your future Cash Refunds. Children are eligible regardless of their health.
More information on this rider is below (taken from the AICPA site):
A dependent child is covered if he or she is unmarried and under age 25.
Coverage may continue past age 25 for incapacitated children.
Legally adopted and stepchildren who depend on the insured member for support and maintenance may also be covered.
Is the Dependent Child rider worth the extra cost?
The additional premium for this rider is very low compared to many other life insurance policies. Typically, a child life insurance rider runs an additional $5 per month (not per year). So, this is well worth the cost. The last thing you want to worry about is the cost of paying for your child’s funeral. Without question, this would be a devastating experience. The additional financial burden of funeral expenses could be alleviated with this coverage.
The premium for this rider is the same regardless of family size. It is a smart rider to add if you have more than one child.
Accelerated Death Benefit for Terminal Illness
This benefit is not a rider, but is a policy provision that can be exercised. Most life insurance policies include this benefit, but the terms can vary. According to the AICPA, the terms of this benefit are as follows:
…participants who become terminally ill while covered get a portion of their life insurance benefit in one lump sum. Your death benefit will be reduced by the amount you receive. You can receive a portion that does not exceed 75% of your life insurance amount or $1 million, whichever is less.
The accelerated death benefit received may be taxable, whereas life insurance proceeds generally are not taxable. This is a nice option to have in certain situations, but it would be important to consult a tax advisor before exercising the benefit.
AICPA Life Insurance Riders – Conclusion
The AICPA riders are important to consider and evaluate. If you are comparing policies that are similar, then a valuable rider could tip the scale for you. We will be glad to check the rates for plans and riders for you. Comparing apples-to-apples isn’t always possible, but we do our best to perform accurate comparison and help you make an informed decision.
We can compare individual policies to the AICPA group policies and help you understand key difference. If you have read our other AICPA articles, you know that it’s not a simple process to evaluate and compare AICPA group plans to other options. This is due to the Trust Refunds and non-guaranteed increasing premiums with the CPA Life plans. We understand these plans.
Please call or email us for a free consultation or customized quotes.