Life insurance riders are additional benefits that can be added to your policy to provide extra coverage and flexibility.
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Life insurance policies primarily provide financial assistance to the policyholder's family in the event of the person's death. While a standard insurance policy can offer basic coverage, it may not always be enough to meet the policyholder's specific needs. This is where life insurance policy riders come in. In this comprehensive guide, we will explore what such insurance policy riders are, how they work, and what benefits they offer.
Life Insurance Riders are optional benefits that can be added to a life insurance policy to enhance its coverage. These riders can provide additional benefits, such as coverage for critical illnesses, accidental death, and disability. Some riders may also offer additional income in the event of a long-term illness or disability.
There are several types of Life Insurance Riders available in India. Here are some of the most common ones.
A Critical Illness Rider provides coverage in the event that the policyholder is diagnosed with a critical illness. This rider typically covers illnesses such as cancer, heart attack, and stroke, and provides a lump sum payment to the policyholder in the event of a covered illness.
An Accidental Death Rider provides additional coverage in the event that the policyholder dies as a result of an accident. This rider can provide a lump sum payment to the policyholder's beneficiaries in addition to the death benefit of the life insurance policy.
A Disability Rider provides coverage in the event that the policyholder becomes disabled and is unable to work. This rider can provide a regular income to the policyholder in the event of a covered disability, and can also cover the cost of medical treatment and rehabilitation.
The Waiver of Premium Rider provides coverage in the event that the policyholder becomes disabled and is unable to pay their life insurance premiums. This rider can waive the premiums for the life insurance policy for the duration of the disability, ensuring that the policy remains in force.
An Income Benefit Rider provides additional income to the policyholder in the event that they become disabled and are unable to work. This rider can provide a regular income to the policyholder for a set period of time, allowing them to maintain their standard of living.
A Term Rider provides coverage for a set period of time in addition to the coverage provided by the life insurance policy. This rider can be used to cover specific needs, such as the repayment of a mortgage or the education of a child.
A Guaranteed Insurability Rider is an additional provision that allows the policyholder to purchase additional coverage at a later date without the need for a medical exam or underwriting. This rider is useful for individuals who may anticipate a change in their health status or financial situation in the future.
A Long-term Care Rider is an additional provision that provides coverage for long-term care services such as home health care, nursing home care, or assisted living. This rider is useful for individuals who anticipate needing long-term care services in the future.
Here are a few reasons why you should consider adding Life Insurance Riders to your policy.
Having insurance riders on your policy can greatly enhance the safety net provided by your basic term life insurance plan. In this context, death is usually the cause of financial difficulties for a family, but accidental disabilities and life-threatening illnesses with expensive treatments can be equally devastating. By adding riders to your life insurance policy, you can provide better financial protection for your family in case of unforeseen circumstances.
For example, if your base life insurance policy has a sum assured benefit of Rs. 1 crore, you can add Rs. 25 lakhs more with a Critical Illness Rider. This is particularly important in cases where accidental deaths or long hospitalisations with medical expenses may precede the ultimate demise.
If you suffer from a critical illness or accidental disability, life insurance riders can provide financial assistance. However, this may also result in a loss of income, making it difficult to continue paying premiums. To avoid the life cover from lapsing, you can opt for the Premium Waiver Benefit. This means that whenever you submit a claim for critical illness or disability, your life cover will continue without any additional premium payments.
Riders are designed to work in conjunction with the base life cover, making them easier to manage. If you were to buy separate accidental and critical illness insurance policies, you would not only pay more in premiums but also have to manage more than one policy. Additionally, combining benefits may not be possible, meaning you may miss out on some benefits if you don't have the right riders on your policy.
When purchasing an online term insurance plan, you can customise your rider benefits and calculate premium costs to ensure adequate coverage. It is important to carefully consider the maturity or expiry of the insurance plan, as some riders may expire before the base life cover does.
Here are the benefits of buying Life Insurance Riders.
Riders can be customised to suit your specific requirements and can be added or removed based on your changing needs.
Riders are a cost-effective way to enhance your life insurance coverage without having to buy an additional policy.
The premium paid for life insurance riders is eligible for tax deductions under Section 80C of the Income Tax Act.
Some common Life Insurance Riders in India include accidental death and disability benefit rider, Critical Illness Rider, waiver of premium rider, and Term Rider.
It is not necessary to purchase a rider with a life insurance policy in India, but it can provide additional protection and peace of mind for the policyholder and their family. It is important to consider the individual needs and circumstances of the policyholder when deciding whether to add a rider to their policy.
Yes, there may be some restrictions on the types of riders that can be added to a life insurance policy in India. For example, some riders may only be available for certain types of policies, such as Term or Whole Life Policies. Additionally, policyholders may need to meet certain age or health requirements to be eligible for certain riders.
The cost of adding a rider to a life insurance policy in India can vary depending on the type of rider and the insurance provider. Riders typically require an additional premium payment, which can increase the overall cost of the policy. It is important to review the terms and conditions of the rider and understand the cost implications before adding it to a policy.
Yes, a rider can be removed from a life insurance policy in India if the policyholder no longer needs or wants the additional coverage. However, it is important to review the terms and conditions of the policy and the rider to understand any penalties or fees that may apply for removing the rider.
Yes, riders are included in the death benefit payout of a life insurance policy in India. If the policyholder dies while the rider is in effect, the beneficiaries will receive the additional coverage provided by the rider in addition to the base death benefit.
Yes, riders can be added to a Group Life Insurance Policy in India. Group policies may offer different types of riders than individual policies, so it is important to review the options and consider the needs of the group members before adding a rider to the policy.
The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes.