Rider option offered in Life Insurance

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Rider option is terms of an insurance policy that can be bought in addition to basic policy. This feature allows you to make modifications relating to terms and conditions or its coverage. This extra option does not come for free, for this rider you have to pay out an extra fee for it. Hence, rider option gives you right of correcting terms and conditions of your insurance whenever you need to do in future.

What are Riders in Insurance?

Riders are add-ons or additional benefits which you can opt for along with your current life insurance policy at affordable rates. Riders are tools that help you in expanding your life insurance coverage. Read Healthy lifestyles can save your Money on Life Insurance

How to get Rider Option

It is important to understand that riders do not come automatically with all insurances. Thus it is important to consult with an insurance expert about this option before making agreement. Once you decide to opt for rider option, you need to ask your insurance company to provide you with rider policy in addition to life insurance.

However, if you already have policy and want to know if you are eligible for rider option or not, then you have to contact customer care service of your insurance company. Read “Why Is Life Insurance Necessary for Life?” for understanding more about Life Insurance.

Why to take Rider Option

This rider option gives you an additional safety of making changes in insurance agreement anytime in future. But normal policies do not give you any chance for modification in policy. Riders help you to adapt insurance product as per your need. In other words, it helps you to make to order life insurance cover by providing coverage with life cover.

For example, accelerated death rider benefit on life insurance cover will ensure that you receive your payment if you diagnosed with illness and are still alive. In such case it becomes easier to get money for your treatment from insurance company. In case of death, your dependents will get only part of insurance as other part was already given to insured for treatment.

Which Rider to choose?

Riders are not difficult, but you need to select right one. However, each insurer offers at least three different types of riders and agents will try to convince you to take as many as allowed. For this IRDA enforced rule to check insurance agents from selling riders without need.

IRDA said that premium for all riders cannot exceed 30 per cent of base life insurance premium. Also, it is mandatory that tenure of rider policy and life insurance policy will be same. Read what to do if your insurance claim gets rejected?

Types of rider options to select for both Term and Whole Life policies

  • You will get hospital cash benefit rider with cash in case of sudden hospitalization
  • Guaranteed insurability rider allows you to get whole life insurance at different stages without any medical examinations.
  • In case of critical disease, critical illness benefit rider takes care of our expenses.
  • Accidental disability benefit rider gives you protection against disabilities during your policy term
  • Accidental death rider will compensate cost incurred in your death due to an accident during your policy term
  • Premium waiver rider ensures that you do not have to pay any life insurance premium in case of total permanent disability. In such situation premiums will be waived off if certain conditions are fulfilled.
  • In case of death or disability rider ensures that policy premium is waived off in sudden death which is again to certain condition.

Before you buy a life insurance policy, understanding riders and provisions is one of your main tasks. An insurer will not allow you to modify a life insurance policy, but by opting for rider, you will gain control over ever-changing life situations.

Benefits of riders

Riders are an excellent solution to increase your insurance coverage without buying new policy. Here are some of key benefits of riders. You may also like to read Important Term Insurance Riders and Their Benefits

Extra coverage: You can enjoy full coverage by attaching rider to main insurance policy. For example, critical illness rider pays lump sum amount which can be used to deal with household expenses, loan EMIs and for other financial liabilities apart from medical expenses.

Affordability: Buying rider is more affordable than buying separate insurance policy. Further, there are many types of riders which one can choose as per their needs. In this way, it becomes easy to cover at an affordable cost.

Flexibility: you can add rider to any of your insurance policy term. Like ULIP, endowment, whole life and your policy as per your needs. Which should you opt for A Stand Alone Policy or A Rider?

Tax benefits: Life insurance policies riders also enjoy tax benefits as per tax rules. Check Factor deciding affect your Life Insurance Premiums rates 

IRDAI Rules for riders

  • As mandated by IRDAI rules, total rider premium cannot exceed 30 percent of base plan premium. Also, in case of term plans, premium under health riders cannot exceed 100 percent of base plan premium.
  • The term of rider cannot exceed base policy term. Even sum assured of rider cannot exceed sum assured of primary policy.
  • Conditions relating to rider, entry age and sum assured of each rider will depend on conditions of base policy.
  • However, Rider benefits will stop on maturity of policy or when you achieve age of 65, whichever happens earlier

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