Key takeaways

• Riders help in enhancing your life insurance policy with added benefits.
• Different riders in India include Accidental Death Benefit, Accidental Total and Permanent Disability, Critical Illness, and Waiver of Premium Rider.
• Always consider rider inclusions and exclusions before adding one to your policy.

The phrase "one size fits all" does not apply to a life insurance policy. People have different lifestyles and financial requirements, emphasising the need for a customisable plan. This is where life insurance riders step in. They are added benefits applied to an insurance policy, enhancing its overall benefits. Specifically, beneficial for addressing the unique requirements of customers, riders come at an additional cost borne by the policyholder.

Upon selecting a rider with a policy, you enhance your overall protection and financial support for your family. In India, different riders with life insurance policies help you in accidents, critical illnesses and disability.

In today’s blog, we will talk about the different kinds of riders. So, let’s get started and learn all about enhancing your policy for additional benefits.

Accidental Death Benefit Rider

You can opt for an Accidental Death Benefit (ADB) rider along with your life insurance plan if you want additional coverage. It provides financial protection to the nominee in case the policyholder passes away due to an accident. An affordable rider, this provides you with an additional amount (a lumpsum) with your base insurance amount. This monetary support is crucial to ensure your family’s financial protection during tough times.

Accidental Total and Permanent Disability Rider

Accidental Total and Permanent Disability Rider or ATPD is an important rider in the life insurance sector. With this, you can safeguard your family’s finances if you meet with an accident and suffer a permanent or total disability. In case of an accident, this rider offers an additional amount to the policyholder, while the base term plan remains as is. There is usually a waiting period of 180 days after the accident. During this period, if the policyholder is diagnosed with a total or permanent disability, then he/she can claim the rider sum assured.

Critical Illness Rider

Critical Illness Rider, a supplementary feature attached to a life insurance policy ensuring coverage for specific medical conditions and critical illnesses. With this rider, the policyholder receives a lumpsum if diagnosed with a covered illness during the policy term. It also comes with a list of covered medical conditions which are subject to change depending upon the insurance provider and their policy terms and conditions. Some of the commonly covered critical illnesses in India include heart attack, kidney failure, paralysis, stroke, etc.

Waiver of Premium Rider

This rider gives you the option to waive off premiums in case of events like the unfortunate demise of the policyholder, disability or even critical illness. In case you, as the policyholder is unable to pay premiums owing to these unforeseen circumstances, the rider acts a safety net, ensuring that your insurance coverage remains intact.

Things to keep in mind while selecting a term life insurance with riders

While selecting a rider with your life insurance policy, it is essential to make a note of a few things listed down below:

Expenses & Income: It is advisable to assess your income and expenses carefully before selecting a rider. Since they come at an added cost, select the one that meets your requirements perfectly.

Coverage amount offered: With multiple life insurance policies available in the market with different coverage amounts, selecting a rider offering a good coverage amount becomes crucial.

Tax Benefits: Opting for riders along with your life insurance plan can help you avail tax benefits as per the prevailing tax laws. This is beneficial for you if you wish to reduce your taxable income.

Inclusions & Exclusions: Always check the rider inclusions and exclusions beforehand. This will help you avoid any last-minute claim-related hassles as some conditions are not covered by specific riders. For example, certain stages of cancer are not covered even if you opt for a critical illness rider.

What are the limitations of riders?

• Eligibility conditions: Some life insurance riders have age restrictions and are available only with certain types of insurance products like, term insurance or ULIPs.
• Added costs: Riders come at an additional cost and the total cost of the insurance policy may increase significantly upon adding a rider to your plan.
• Waiting and survival period: Health riders may come with a waiting period from the date of policy inception or some other restriction. Others have a survival period that requires the policyholder to survive for a minimum period to avail all benefits of the policy.
• Non-transferrable: Riders are attached to your base policy and cannot be transferred to another insurer.

Conclusion

Buying a rider with your life insurance plan is a smart move. Not only does it help enhance risk coverage over your base policy, but offers added financial safety to your loved ones in times of need. Before purchasing a rider, do read the terms and conditions and understand all policy inclusions and exclusions thoroughly. Talk to an insurance agent before making any purchase to clear all doubts and make a wise choice.

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

Reference: https://www.prudential.com/financial-education/saving-investing-strategies-basics