Student Question of the Week: Retirement Protection Benefit Rider Versus Life Insurance

Student Question from: Margie L.
Course:  Insurance Planning

Student Question:

Why would the Insured purchase a Retirement Protection Benefit Rider instead of a life insurance policy (i.e., 10, 15, 20 or 30-year term)?

Instructor Response:

Hi Margie! 

This is a very good question.  The Retirement Protection Benefit Rider provides something that life insurance doesn’t provide. A Retirement Protection Benefit Rider continues to fund the insured’s retirement plan contributions in the event of disability.  These retirement plan contributions are paid into a trust (generally) and the best case result is that the insured survives long enough to retire.  If the insured dies before retirement age, the amount accumulated in the trust is paid to designated beneficiaries.