A rider is an option that can be added onto an insurance or annuity contract to provide additional coverage and/or benefits. By taking advantage of riders, policyowners and annuitants can customize policies to help safeguard against specific situations and concerns.
One concern facing many people today is the possibility of unemployment at some time in the future. With the ongoing downsizing of corporations, those concerns are valid. New York Life addressed that concern in 1992 by becoming the first major insurer to offer a rider that helps ease the financial stress of unemployment: the Unemployment Rider.
This rider is available, at point of sale, with Whole Life Insurance or a Deferred Annuity (see What Exactly is an Annuity?). The Unemployment Rider offers Whole Life policyowners a reprieve from paying premiums for up to an entire year of unemployment, once the insured has been unemployed for 60 consecutive days. Individuals who have purchased a deferred annuity (through New York Life Insurance and Annuity Corporation) can use the rider to access funds, in the event of unemployment. To be eligible, the policy must be in force one year prior to the claim and the policyowner must submit the documentation from the state's department of labor indicating that he or she is receiving unemployment benefits.
Employment May End, But Long Term Goals Don't Have To
Unemployment can create havoc in the lives of individuals who have based their short and long-term commitments on their current earning capabilities. The problem is this: when a person becomes unemployed, one of the first things that goes is the employer sponsored insurance protection. In most cases, if people do not continue to pay their insurance premiums, they also lose their personal insurance coverage. Losing a job is traumatic enough — but it is unthinkable for a breadwinner to also lose the vital financial coverage he/she has been counting on to protect his/her family or goals. The Unemployment Rider is a valuable and compassionate response to situations such as these. And it couldn't have been more timely.
Less than 10 years ago, it was pretty much assumed that those who worked hard and secured a good education would have promising job prospects after college. It wasn't just students who maintained that sense of hope, either. People in the work force often believed in their employers — and in their own futures. Although no promises were ever carved in stone, chances were that if you were a loyal and hardworking member of a strong company, you could feel secure that you would keep your job as long as you wanted.
How things have changed since the 1980s! In the 2000s, job "insecurity" has reached epidemic proportions. With the reality of corporate downsizing and economic uncertainty staring us in the face, there are no longer any guarantees. Having a college degree doesn't guarantee anyone a job and, in many cases, having a number of years with an employer doesn't guarantee a future with the company. It seems as if every day we hear about yet another major corporation eliminating hundreds, even thousands of positions. Many of us know people who have been affected by this situation.
No one can predict the future, but the options available through the Unemployment Rider can help safeguard the future until an unemployed individual is able to get back on his/her feet. With the creation of the Unemployment Rider, New York Life has taken another action to help families prepare for changing times and the possibilities that those changes can bring. Contact a local New York Life agent for more information on this innovative policy rider.
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