Document of Life Insurance Policy and calculator, for background
When you buy a life policy, you can increase the plan’s coverage by adding riders to the plan. Riders will enhance the coverage of an insurance plan and provide protection in specific situations.
What are life insurance riders?
Life insurance riders or add-ons offer additional coverage against a pre-determined set of conditions or circumstances at an additional premium. For instance, the Waiver of Premium rider will waive of all the future premium in case of certain circumstances like loss of a job, death of the policyholder or permanent disability.
How to benefit from the inclusion of riders?
Including riders is a great way to enhance the insurance coverage you get through a plan. The best life insurance online is designed in such a way that they fulfil the basic insurance needs of their customers. However, for individuals facing different health issues, including riders can be quite beneficial.
As per the IRDAI (Insurance Regulatory and Development Authority of India), insurance companies provide a wide range of riders for their customers. Adding riders to a plan will lead to a small increase in the premium amount, depending on the type and number of riders included. You must understand:
- The premium sum collected from riders must not be above 30% of the policy premium.
- The rider term must not exceed the policy tenure.
- Sum assured from all riders must be lower than the sum assured by basic premium.
When you buy a life insurance policy with riders, you must learn about the term of the rider, the sum assured, the entry age, and other factors which will affect the insurance coverage. It is important to know that most insurers do not provide riders once the policyholder is above 65 years of age.
Types of riders available:
- Term assurance rider:
You can improve the risk coverage of your basic term insurance policy through this rider. Adding this rider to the plan is relatively easy. You will only have to pay a nominal increase in the premium, and you will get a high sum assured. With this rider, the insurer provides monthly payouts or lump sum payout.
- Critical illness rider:
A critical illness rider will provide you with insurance coverage if you are diagnosed with a critical illness. These riders are helpful as critical illnesses are not included in term policies. They can be quite beneficial for providing financial protection in the case of critical illnesses. If the policyholder dies because of a critical condition, the beneficiaries are provided with the sum assured.
- Income Benefit on Accidental Disability rider:
This rider can be beneficial for individuals who are the sole earning members of a household but may not be able to earn for the family due to accidental disability. With this rider, the dependent family would have access to financial aid for a period. It can be quite beneficial for maintaining the financial stability of a household.
- Accidental death benefit rider:
The accidental death of the policyholder can result in immense financial stress in their home. Hence, including an accidental death benefit rider to the life insurance policy will provide the policyholder’s family with additional financial coverage over the policy’s basic coverage.
- Waiver of premium:
If the policyholder is in a situation where they cannot pay the premiums towards their insurance plan, the waiver of premium will come in handy. With this rider, the policy will still be in effect even if you fail to pay the premium.
Though a life insurance cover may suffice as a form of financial protection, the inclusion of riders can help extend this coverage to help in situations where the basic life cover may not suffice.