Top Life Insurance Riders That You Must Know

It’s great that you have availed a life insurance policy to protect the future of loved ones. In this World of uncertainty, only life insurance can provide for your family when there is a loss of income on an unexpected demise. 

If you are the breadwinner of your family, then it is extremely important for you to avail a life insurance policy. Life insurance plan covers the risk of death of the policyholder, within the term of the plan. The main purpose of availing a life insurance policy is to substitute for loss of income, when the breadwinner of the family passes away.

Term Life insurance policies are pure risk protection plans with no survival benefits. Life insurer pays out the sum assured or death benefits to the nominee or beneficiary, when the insured dies within the term of the plan. This helps family members continue leading the current lifestyle.

Types of Life Insurance:

• Term Life Insurance Policy
• Unit Linked Insurance Plan (ULIP)
• Endowment Policy
• Money Back Policy
• Whole life Insurance Policy
• Child Insurance Plans
• Annuity Plans for retirement

To choose the right life insurance policy, you must first understand your requirements. Analyze family’s lifestyle, future expenses and liabilities. Your life insurance policy must be able to take care of all these needs. To get an idea on how much life insurance you need, take a look at IndianMoney.com HLV Calculator.

You can increase the sum assured by availing riders or add-on features, along with a life insurance policy. Riders alone pay a considerable sum if the insured happens to meet specific incidents, as specified under the rider. Riders offer rider sum assured at additional premiums.

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SEE ALSO: What is Meant by Life Insurance?

Following are the Most Popular Riders:

1) Accidental Death Benefit Rider

If you travel long distances frequently (be it by driving or public transport) or/and work in a hazardous environment, then it’s advisable for you to avail accidental death benefit rider with a life insurance policy.

If death is accidental, then this rider pays out the rider benefit in addition to the sum assured of your life insurance policy. With the number of road accidents on the rise, it’s wise to avail this rider.

2) Accidental Permanent Disability Rider

If you lose the ability to work due to an accident which causes loss of limbs, then accidental permanent disability rider pays out the rider sum assured. If the policyholder dies within the term of the policy, then the nominee would get the sum assured of the life insurance policy. This rider is generally tied up with accidental death benefit rider.   

3) Critical Illness Rider

This rider pays out the rider sum assured if the policyholder is diagnosed with a critical illness. This is paid if the insured survives 30 days post diagnosis of the illness. Though not all critical illnesses cause death immediately, they would hamper your ability to work which results in loss of income. This is when the critical illness rider comes into play. This rider covers major critical illnesses like heart attack, stroke, kidney failure and so on. Not all critical illnesses are due to negative family medical history; hence it’s advisable that everyone avail this rider.

4) Waiver of Premium Rider

If you are not able to afford life insurance premiums due to loss of income caused by a disability, your life insurance policy would lapse. If you have availed waiver of premium rider, then your life insurance policy would continue to be active even if you don’t pay the premiums. Usually, this rider is availed in addition to the accidental permanent disability rider.

5) Accelerated Death Benefit Rider

Accelerated death benefit rider pays out a part of sum assured of the policy, if the policyholder is diagnosed with a terminal illness like Cancer, Ebola, Leukemia and so on, so that the policyholder is not short on funds for the treatment of the disease. The remaining sum assured of the life insurance policy is paid out to the nominee when the insured dies within the term of the life policy.

6) Hospital Cash Rider

A fixed sum is paid out on a daily basis to cover your hospitalization. This helps in covering medical expenses and reduces your burden vis-à-vis expenses. This rider is not popular as individuals have health insurance policies to cover hospitalization.

7) Surgical Care Rider

This rider pays out a lump sum if the insured has to undergo an unavoidable surgery. The surgical care rider covers most major and minor surgeries.

8) Term Rider

This rider pays out a lump sum or monthly payouts to the nominee, if the policyholder dies within the specified term of the rider. This rider’s sum assured is huge and can be compared with that of the life insurance policy. Those who want to leave behind a legacy can avail term rider.

SEE ALSO: 7 Wrong Reasons for Availing Life Insurance

Which Riders Should I Avail?

To decide on whether to avail riders or not, you must first analyze your life insurance policy’s inclusions and exclusions. Some policies have in-built riders. Avail only those riders that are going to benefit you in some way.

Note that some life insurers allow you to avail riders only at the start of the life insurance policy. Hence it is extremely important that you check terms and conditions of life insurance plans. This helps in deciding whether or not to avail riders. However, you can cancel the rider, anytime. The rider premiums are payable with the annual premiums of the life insurance policy.

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