All you need to know about different kinds of Life Insurance Riders
Life Insurance is required to handle various requirements and situations at different phases of your life.
With the ever-improving standard of living, it has become inevitable to invest in a product like life insurance to safeguard your family. But people often avoid buying it looking at the expensive premiums. However, you can reduce the premium costs by getting riders at affordable rates. Life insurance riders offer extra protection apart from your insurance coverage.
Let us discuss Life Insurance Riders in detail
Life Insurance Riders are add-on benefits that can be purchased and added to your base insurance policy. Adding a rider expands the limit of your insurance coverage. Buying a rider will cost you a bit extra; however, this additional cost is usually low. Cost of premiums, insurance coverage amount, term and conditions related riders generally differ from insurer to insurer. Most insurers don’t allow any modification in the insurance policy, but in case of riders, you can choose the one as per your convenience and requirement.
Here are some of the most common and popular life insurance riders available in the market.
- Accidental Death Benefit Rider: In case the insured dies due to an accident, then under this rider, an additional amount as the death benefit is paid out. Therefore, upon death due to accident, the family of the insured gets double the policy coverage amount. However, it is essential to understand the limitation of this rider as well as several insurance companies restrict the meaning of the term – accident. If you are the sole bread earner of the family, then this rider is beneficial because of the double benefit it offers.
- Premium Waiver rider: If the insured loses his or her income or suffers from permanent disability due to an injury or illness, then under this rider, future premiums get waived off. Any mishap with the main earning of the family can be disheartening and challenging for the family members. In such a situation, this rider helps them by waiving off the premiums due on the base insurance policy until the insured person is fit to work again. It can be instrumental if the policy premiums are on the higher side.
- Guaranteed Insurability Rider: This rider lets you add insurance coverage within the specified period without taking the medical examination further. It is very beneficial during relevant circumstances in life, such as marriage, the birth of a child or increase in income. For instance, if your health deteriorates with age, then you can apply for extra coverage under this rider. This rider might also provide the option to renew your base policy without medical check-up at the end of its term.
- Child Term Rider: The Child term Insurance rider offers benefit in case of the demise of the insured’s child who is minimum 15 days old and has their name in the application. The child can be an insured person’s biological child, legally adopted child or stepchild. Under this rider, children are covered till the age of 22 or until they get married, whichever comes first. After the specified period, the term life insurance can be converted into a long-lasting insurance policy with coverage up to 5-times of the original amount without undergoing any medical tests.
- Family Income Benefit Rider: In the case of the insured’s death, this rider provides the insured’s family members with a steady flow of income. However, while purchasing this rider, you need to decide the number of years till which your family will receive the benefit amount.
- Terminal Illness rider: This ride is useful if the insured person has been diagnosed with a terminal illness wherein his or her lifespan gets considerably shorten with time. Although the definition of terminal illness varies from one insurer to another, so before buying this rider do check what it covers.
- Return of Premium Rider: Under this rider, you pay your premiums, and if you survive the policy tenure, you get all the premiums back. Insurers usually sell this rider with many variations; hence it is essential that while buying this rider you do verify its variants.
- Critical illness rider: This rider offers coverage against major critical illnesses which at times are not covered under health insurance policies. Critical diseases include cancer, heart and artery ailments, or brain and nervous system illnesses. On being diagnosed with any critical ailment, mentioned payments are given to the policyholder.
Insurance policies don’t allow you to modify as per your requirements, but life insurance riders empower you to get control over the coverage. It is essential that you are aware of the terms and conditions of a specific rider. So before buying sit down, carefully assess the benefit and limitation of the rider and then choose the best-suited one for your family. If you want to know about different term plan riders, then visit BimaKaro and choose the best one for yourself.