Features of Riders In Insurance

An insurance policy rider is a supplement or addition to an existing insurance policy that provides additional coverage, or risk protection. Riders are cost efficient additions that you buy in addition to your current term insurance policy to increase your life insurance coverage. In other words, riders broaden and strengthen your term insurance coverage, covering more than simply the finality of death.

Different Types of Riders

Here is a list of the most popular life insurance riders which aim to provide even more maximised protection to the insured person. 

1. Premium Waiver Benefit Rider 

Term insurance normally expires when the premiums are not paid. This waiver benefit means that if the policyholder is disabled or injured for an extended period of time, or if the policyholder dies while the life assured under the policy is still alive, all future premium payments due under the policy after the date of such an incident will be waived, that is, they will not be required to be paid. This rider also covers both permanent and temporary disability.

2. Accidental Death Benefit Rider 

This is a rider benefit that is payable if the life assured dies from an accidental cause during the term of the rider benefit. The accidental death sum assured is payable in addition to the basic sum assured in such a circumstance. As an example, consider the following: If a person currently has a Rs 20 lakh accidental insurance policy and has no responsibility, he may not need to add the accidental death benefit in his term insurance policy. However, if he is poorly covered under life insurance and is unable to afford another policy for accident coverage, he may choose the accidental death benefit. This will be a cost-effective method of providing additional financial security for his survivor.

3. Critical Illness Rider 

This rider benefit is provided if you are diagnosed with one of the catastrophic conditions listed in the policy document, such as cancer, stroke, heart attack, kidney failure, and so on. In such a situation, the critical sickness sum assured is paid. This rider benefit is no longer available, and the premium for it is no longer payable.

How To Add Riders? 

Insurance policy riders are sold separately but concurrently with insurance policies. When you buy term insurance from Future Generali, for example, you may also choose from the riders that are available. You can purchase your insurance policy as usual, and then add riders to it for additional protection against specific risks, such as a premium waiver in the event of death, accidental death cover, disability cover, critical illness cover, hospitalisation benefits, loss of employment cover, accelerated death benefit, and so on. It should be emphasised, however, that these riders should be purchased at the same time as the main policy. Riders can't be added again once they've been used. 

While some insurers include riders in their basic life insurance plans, others provide flexible plans that can be tailored to your specific needs. As a result, in the latter case, you have the choice of attaching the desired riders to the base policy rather than being offered a ready-made policy with riders you may or may not find useful.

Benefits of Riders

Insurance riders are an excellent way to increase your insurance coverage without purchasing a new policy. To summarise the advantages of term riders:

• They provide additional coverage under term insurance, which can be a lifeline in times of financial distress.
• Affordability: Purchasing a rider is much less expensive than purchasing a separate insurance policy. It's also less expensive because you can pick and choose which riders you want.
• In compliance with the applicable tax laws, you receive tax benefits on riders exactly as you would on the base policy.

Endnotes

The riders also include the following restrictions: the premium for health-related or critical illness riders shall not exceed 100 percent of the premium for the basic product, the premiums for all other life insurance riders combined shall not exceed 30 percent of the premium for the basic product, and any benefit arising under any of the above-mentioned riders shall not exceed the sum of the premiums for the basic product. It is critical that you understand what riders your insurer provides with your insurance so that you can take advantage of the reasonable add-on features.

Must Read: Term Insurance Riders and How They Benefit You

Top 5 Riders To Add To A Term Insurance Plan

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.