What are Riders in Life Insurance? What are their benefits ?
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All life insurance plans come with a standard coverage as per type of the plan chosen. However, the standard coverage of a life insurance plan can be enhanced with the help of life insurance riders. Adding a life insurance rider to your policy increases your coverage and adds some extra flexibility to the terms and conditions. Life Insurance Riders are doing the same thing for you.
What are Life Insurance Riders?
To simply put, an insurance policy riders is a provision or modification to an existing insurance policy that provides additional coverage, i.e. additional risk protection. Riders are effective add-ons that you can choose to expand life insurance coverage along with your current term insurance policy at affordable rates.In other words, riders make your term insurance coverage reliable and broad, supporting more than just the end of your life.
You May Also Like to Read:- How To Choose The Right Life Insurance Riders?
What are the Different Types of Life Insurance Riders?
Following are the different types of life insurance riders:
1. Waiver of Premiums Rider
This helps ensure that your life insurance policy remains active even if you are unable to pay your premiums. The effect of this policy would be to waive all future premiums, but to continue the policy benefits.
2. Critical Illness Rider
Under such a rider, you pay an extra amount to be covered if you are diagnosed with any of the critical illnesses mentioned in the policy document. Acting as an income replacement plan, the amount received by the rider can be used to cover both medical and household expenses.Although the critical illnesses covered by the policy may vary from one insurer to another, some diseases, such as cancer, heart attack, brain tumour, etc., are covered by the rider.
3. Accidental Death Rider
All life insurance policies cover accidental death. However, when you buy an accidental death driver, the insurer pays up to twice the amount assured to your nominee in case you die in an accident.
4. Income Benefit Rider
Provides a regular source of income to the family in the event of the death or disability of the policyholder.
5. Permanent & Partial Disability Rider
It is helpful if you become temporarily or permanently disabled due to an accident. In most scenarios, the insurer pays a specific sum assured for the next five or ten years. In addition, all future premiums on the main insurance policy are waived by the insurance company.
Benefits of Life Insurance Riders
Riders are an excellent way to increase your insurance coverage without buying a new policy. Here are some of the key benefits to riders:
1. Extra Coverage
You can enjoy comprehensive coverage by attaching a rider to the main insurance policy. For example, a critical illness rider pays a lump sum amount that can be used to cover household expenses,Loan EMIs and other financial liabilities other than medical expenses.
2. Affordability
buying a rider is far more affordable than buying a separate insurance policy. In addition, there are different types of riders that can be chosen according to their needs. This makes it easy to cover yourself at an affordable cost.
3. Flexibility
You can add a rider to any of your insurance policies—term, ULIP, endowment, life—and customise your policy to suit your needs.
4. Tax Benefits
Riders are additional to life insurance policies. As a result, payments to riders also benefit from tax benefits in accordance with the prevailing tax rules.
Also Read:- All About LIC's Premium Waiver Benefit Rider
What Is A Child Rider In Life Insurance Policy?
Conclusion
It's vital to know what riders your insurer is offering along with your policy so that you can reap the benefits of the affordable add-on benefits.
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.
