Buying a life insurance policy isn't quite like any other type of purchase. Thanks to Australian law, you can generally expect to get a policy from a fiscally sound company that is capable of paying its claims, but beyond that, the policies themselves are non-standard. There are a host of riders and additions many of which will greatly escalate the amount of premium that you must pay every month. Some of those additions are indeed useful, and depending on your own situation, you may wish to take advantage of some of them. Others, however, may offer no added utility at all.

Examine each addition carefully, read it in detail, and above all, don't just take anyone's word that you need it. A few too many of these added bits of coverage will quickly transform what you thought was an affordable policy into an unmanageable monthly bill.

One of the more useful riders available on most whole life policies (but not on term policies) is a nonforfeiture provision, which pays your premium out of the cash value of your policy if your policy lapses for reason of nonpayment. Situations change unexpectedly. Sudden expenses may come up, you may become disabled, or unemployed. If that happens, this provision protects you from losing your investment. Another common option, assuming you have accrued enough cash value in your whole life policy, is to use that value to purchase a policy with a reduced death benefit, that will not require any more premium payments. Another optional rider is a disability rider, which keeps the policy in force and may waive the premium if you are disabled and cannot work. Another common and useful rider is an accelerated death benefit, which provides you with an early payment of some or all of your death benefit, in the event you become terminally ill. Other riders may make a payment upon diagnosis of certain types of diseases.

There are some riders that are designed to take away, rather than add to your coverage. For example, suppose you are engaged in a dangerous occupation or hobby. Perhaps you enjoy skydiving, running with the bulls, or are an amateur race car driver. Your insurer may ask you to accept a rider that states that your policy becomes void if you die as a result of that activity. Obviously nobody wants to add such a rider, but in some cases it is the only way in which an insurer will write a policy.

When considering a policy, compare the rates of several providers, and examine the various riders and costs involved in each case. While one carrier may offer an attractive basic rate, the cost of the desirable riders may quickly make it unaffordable; while another carrier may offer a slightly higher base rate but a lower cost for the riders--making the latter the more affordable option.