Final answer:
The disability income rider is often included in juvenile life insurance policies to provide financial support if the child-insured becomes unable to work due to disability before reaching adulthood. It ensures a steady income stream similar in concept to Social Security Disability Insurance but is provided by the insurer.
Step-by-step explanation:
The disability income rider is typically attached to a juvenile life insurance policy. This rider is designed to provide financial support in the event that the policyholder becomes disabled and is unable to work, contributing to the policy's benefits.
Disability income riders are important for juvenile life insurance policies as they ensure that if the child-insured becomes disabled, typically before reaching adulthood, the policy can provide a stream of income to help with their needs. The rider activates when the insured becomes disabled under the terms of the rider, which often includes requirements similar to Social Security Disability Insurance (SSDI), like the inability to work due to disability expected to last at least twelve months. In this case, the insurer will provide a monthly income to the beneficiary.
It's important to distinguish that these riders are attached to the life insurance policy and are different from Social Security benefits such as SSDI or Supplemental Security Income. Both of these government-provided benefits are also aimed at assisting individuals who are disabled. SSDI provides benefits to workers who can't work because of a disability, and Supplemental Security Income helps those with disabilities or the elderly who have low incomes.