Life insurance is essential to give your loved ones monetary security in the event of your untimely death. To enhance and customise this protection, you can utilise add-on riders. These are additional features that customise your basic policy to meet certain needs. This article dives into some of the very common and essential life insurance riders available today.
What Is A Life Insurance Rider?
Life insurance riders are a kind of additional advantage to basic coverage when an additional premium is paid out. They protect events that are not covered by standard policies.
Common Add-On Riders:
There are specific ways of using life insurance riders through which policyholders can be taken care of in cases of critical illnesses, disability, and accidents, making it possible for them to choose a policy that best suits their needs. Here are some common types:
1. Term Rider
A term rider is a provision of a life insurance policy, meant to expand an already existing coverage. The nominee is paid over and above the Base Plan Sum Assured in the event of the death of the policyholder in a specified lump-sum amount.
2. Accidental Death
The accidental death benefit rider will essentially provide cover if the person holding the life insurance policy passes away due to some accident. Rider sum assured is the amount of money totally to be given to the family of the policyholder if they happen to pass away in an accident or due to any other reason when the rider policy is still in operation.
3. Accidental Disability
The accidental disability rider pays out a percentage of the rider sum assured for treatment and other expenses for daily needs in case the policyholder is involved in an accident leading to permanent, partial or total disability.
4. Critical Illness Rider
Life insurance critical illness rider will offer money to compensate for lost income should insured policy holder has been diagnosed with any of the critical illness that is under the policy. In this way the policy guarantees that the policyholder and/or his/her family is provided with the needed cash benefit to treat an acute condition that may manifest itself.
5. Premium Waiver
When incorporated into life insurance plans in India depending on the risks offered, it may exclude future premiums after the policyholder’s death, critical illness or death through accidental total and permanent disability. This rider ensures that the family of the policyholder is provided for under the base life insurance plan regardless of the payments being made by the policyholder.
Benefits Of Life Insurance Riders
Policyholders benefit from life insurance riders through:
- Enhanced Coverage: Enables customising policies for added protection.
- Tailored Protection: Addressing specific risks for personalised security.
- Tax Benefits: Offering deductions under Section 80C of the Income Tax Act.
- Cost-Effective: Providing affordable enhancements to basic coverage.
Life insurance riders extend base policy benefits, offering crucial support during tough times. Selecting suitable riders ensures comprehensive protection and peace of mind for you and your loved ones. To enhance your policy when you buy life insurance in India, consider adding riders for extra protection and customisation.