The Buyt Desk
The insurance riders are additional coverage that you can add to your existing insurance cover. They enhance your coverage apart from the already basic cover with additional premium. Nowadays almost all term insurance plans provide the benefit of riders. The terms and conditions of riders offered by different insurance companies are different. Also their costs vary according to the plan you opt for, the term you opt for and the sum insured. Some companies provide a few riders for free and the other riders will cost you an additional premium to be included in the policy. Always get complete details about the riders that qualify for your policy with your insurance company or agent.
What are life insurance riders?
Life insurance riders are an extra package to cover additional things that you can opt for while buying policy or its renewal. Like for instance you can add a critical illness rider or an accidental disability or death reider. These additional coverage costs you additional premium as it offers wider coverage for the same tenure as that of base policy.
What are the benefits of riders?
Below are a few major benefits of buying riders for existing policy.
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Extra coverage – Instead of buying a new policy for increasing the cover you add extra benefit with the help of a rider to the base insurance policy.
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Tax benefits – All tax benefits that the base policy is entitled to is also applicable to the riders added.
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Flexibility – All kinds of insurance policies provide riders be it ULIP, whole life, term or endowment plans. You have full flexibility to add needed riders while buying the policy or at time of renewal.
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Affordability – Anytime add-ons are affordable than buying a new complete product. As per the needs, riders can be selected without burning hole in the pocket. It is affordable to cover many things under a single umbrella.
What are the factors to consider while opting for the rider?
Requirements – Each rider provides different cover. You should know the purpose for extra cover needed and accordingly choose the rider with features that meet your requirements. Before buying, study every feature of the rider you have chosen.
Affordability – Do not forget that you will have to pay an additional premium for the rider. Pick a rider that falls in your budget range. Make a wise decision while keeping in mind the affordability factor.
Terms & Conditions – Do not buy a rider without reading all the policy terms and conditions vigilantly. Only after thorough study will you get to know what the rider includes, and thus if it satisfies your needs.
Types of Life Insurance Riders
A vast range of additional covers or riders are offered with the life insurance policies. A few to pen down are Waiver of Premium, Accidental Death Benefit, Critical Illness, Family Income Benefit Rider, Surgical Care Rider, HospiCash Rider, Accidental Total and Permanent Disability and Accelerated Death Benefit. Below are 5 most commonly used riders in life insurance plans.
1. Accidental death benefit rider – On accidental demise of the life assured, this rider offers the nominee sum assured along with rider benefit. This rider is applicable only if death happens within the prescribed number of days of accident.
2. Accidental total and permanent disability rider – If the life assured on meeting with accident suffers total permanent disability which disables him /her to earn a living and pay the due premiums, the insurance company provides the rider benefit to the life assured.
3. Critical Illness Rider – If the life assured is diagnosed with any of the listed critical illnesses, the insurance company provides the rider benefit to him/her. This rider covers maximum critical illness of the life insured. Every insurance company has its own set of diseases listed as critical. Usually heart diseases, cancer, organ failure, tumors are considered critical.
4. Waiver of Premium Rider – If the life assured suffers disability caused in an accident which makes him/her unable to pay future premiums, the insurance company will waive off all future payable premiums. Even after waiving off all future payable premiums, he/ she can avail the policy benefits.
5. Accelerated Death Benefit Rider – If the life assured is diagnosed with a terminal illness, a part of the sum assured amount is paid in advance by the insurance company. This amount can be used to treat him/her. The remaining sum assured amount will be paid to the nominee if death of life insured happens within the policy term.
