Should Add a Rider to Your Life Insurance Policy

What are Riders in Insurance?

Insurance riders are add-ons, which means additional benefits that an insured person can choose while purchasing the policy. These add-ons expand the ambit of the insurance coverage by including various other events that might have a negative impact on the policyholder’s life, such as the occurrence of an accident or being critically ill due to some severe disease including cancer or heart attack. As getting an insurance rider broadens the scope of your coverage, its benefits also widens. Let us have a look at some of the benefits.

Benefits of Life Insurance Riders

Extra coverage:

This is the basic advantage that comes with all the rider policies. Here, extra coverage means getting a sum assured even when you are suffering from a critical illness, which is specified in the policy document, or getting paid extra amount if and when you meet an accident that may render you permanently disable or even cause death.

Affordability:

As you are already covered under the base policy, the additional riders are affordably priced. The prices are lower as compared to when you buy them separately. Moreover, with most insurance companies providing you with a wide range of options, you have the option to choose from the lot as per your requirements and that too at a low cost.

Flexibility:

These insurance riders are flexible as it can be attached to any of the insurance policy be it a ULIP, an endowment policy or a whole life insurance policy, while also customising it to your needs.

Tax benefits:

The premiums paid to the riders are also covered under the tax benefits provisions, as mentioned in Section 80D the Income Tax Act 1961.

Now that you are well aware why life insurance riders are important, let us have a look at the different types of riders.

Different Types of Life Insurance Riders

Waiver of premium:

Here, the life insurance policy remains active even when the payment to premium is stopped. This means that the policy will have all the benefits while waiving off all the payments for future premiums.

Critical illness:

In this rider, you need to pay an additional amount so that you are covered for any of the critical illness that is specified in your policy document. However, the provision in the critical illness riders does not cover the same diseases for every policyholder, except for some common ailments such as heart attack, cancer, brain tumour etc.

Accidental death rider:

Since death is already covered under a life insurance policy, this policy might seem superfluous. However, it can be quite beneficial. Here the sum assured to the nominee is doubled in case of the occurrence of an accident.

Permanent & partial disability:

This rider is designed for both permanent and temporary disability caused due to an accident. The sum assured can be paid in lump sum or for a specific period which can be 5 years, 10 years or even more. Furthermore, the future payments for the premiums are also made away with.

Income benefit rider:

Availing this rider can provide for a routine source of income to the members of the family, in case of severe incapacitation of the policyholder or death.

With the information available on why we need life insurance riders along with the base policy, it is imperative that you are also aware of the basic aspects while selecting insurance policies. This includes looking for competitive premium rates and a high claim settlement ratio. Moreover, you can also ask for an online quote or contact customer support for more details.

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