What is a Successor Life Rider?
A successor life rider is an add-on to a second-to-die life insurance policy that allows the surviving insured to increase the policy’s face value after the death of the first insured without submitting new evidence of insurability.
Understanding second-to-die life insurance
When most people buy life insurance, they think of a single policy designed to insure the life of a single person. But you can also buy life insurance that covers two people, called joint life insurance. A married couple might buy this type of life insurance to provide for their children, or business partners may choose to purchase a joint policy together.
Joint life insurance comes in two forms: first-to-die and second-to-die policies. With a first-to-die policy, the death benefit is paid out to the surviving insured when the first insured dies. With a second-to-die policy, however, the death benefit isn’t paid out until both insureds pass away. At that point, the benefit is paid to the beneficiaries named in the policy.
If the second-to-die policy includes a successor life rider, the surviving insured has the option to increase the policy’s death benefit after the first insured dies.
Successor life rider terms
A successor life rider comes with specific terms that lay out how it functions. Generally, it will include two key details:
- Increase amount. The successor life rider will set a predetermined amount by which the surviving insured can increase the policy’s face value. In other words, they don’t get to randomly decide the increased amount. It gets set at the time the rider is put in place.
- Evidence of insurability requirement. Successor life riders get activated without the need for the surviving insured to submit new evidence of insurability. That means that if they’ve developed a serious health condition between purchasing the policy with the rider and the death of the first insured, they’re still able to activate this rider.