Example Of Riders In Life Insurance Plans
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Riders add unanticipated events to your life insurance policy. Some catastrophe protection riders, like term change, are free. Others are extra. Independent protection strategies often offer more coverage than riders. Depending on your needs, some extra goods may be worthwhile. Your agent or dealer can help you customise your life insurance when you buy it.
Examples of Life Insurance Rider
The following are the examples of life insurance riders that are available in India:
- The Accidental Death Benefit Rider
This is the most important rider to think about when you are purchasing a term insurance plan for yourself. This rider will pay the beneficiary an additional portion of the sum insured if the insured individual passes away as the result of an accident. The additional sum of money can vary from one insurance provider to the next, and it often corresponds to the sum of money that was initially insured. It is essential to keep in mind that this rule is only applicable in the event that the death was the result of an accident.
- Critical Illness Benefit Rider
The Critical Illness Benefit Rider usually covers a wide range of serious conditions, such as cardiac arrest, paralysis, cancer, stroke, organ failure, and renal failure. Once you have a critical illness and have received the sum assured, your policy with the critical illness benefit rider may continue or end, depending on the terms of your policy. So, it's important to read the policy statement carefully and understand how this rider works.
Critical illness riders come in a few different forms:
- Chronic Illness Insurance Rider: Accelerated payments are paid out while you're still alive if you're unable to execute two of the six ADLs (eating, bathing, dressing, toileting, transferring, and continence) covered by your chronic illness insurance rider.
- Long-term care (LTC) Insurance Rider: Policies pay for long-term care if you can't do two of the six things you need to do every day, like bathing, getting dressed, or eating. Adding LTC coverage usually costs a lot more, but the policy will still pay for your care even if it ends up costing more than your original death benefit.
- Waiver Of Premium For Disability Insurance Rider: If you become disabled and can't work, you won't have to pay your life insurance premiums if you have a waiver of premium insurance. It might be challenging to qualify for life insurance because each insurance provider has their own definition of what constitutes a handicap.
- Riders for Family Insurance: Adding a "family rider" to your policy means that your spouse and/or children will receive the same level of protection as you. You pay more for the rider to give you the death benefit if the person named in it dies. The types of family insurance riders are:
1. Spousal Insurance Rider: This rider makes sure that you will get a death benefit if your spouse dies. Even if your partner doesn't work or isn't the main source of income, you should still get it because you'll be required to pay for the things they do around the house, like taking care of the kids.
2. Child Insurance Riders: The majority of children don't need life insurance riders. But if the unexpected happens and you have to pay for a child's burial, the rider on your child's insurance policy will help cover the costs. A child insurance rider costs an average of Rs. 500 more per month.
Conclusion
The best approach to determining which riders to include in your life insurance plan is to discuss your specific needs with an independent consultant. An expert can help you narrow down your options. It's great if you don't need much coverage now but will need it as you become older and have a mortgage and children's education costs.
Also read: What Is An Insurance Policy Rider?
