HomeLife InsuranceWhat is a Rider in Life Insurance: Types and Benefits

What is a Rider in Life Insurance: Types and Benefits

A person opts for life insurance policies to reduce risks related to unforeseen financial situations. And the policy can help your family financially when you will not be around them offering support. To maximize the benefits of the life insurance policy, one is provided rider benefits that can cover many aspects of life.

Through the provision of riders in a life insurance investment, many of the best life insurance policies have this as an option, the life assured can get hold of a wide range of perks that are not included in the normal coverage. The insurer can make changes in the rider with the customization facility and of course, the policyholder can check what types of rider benefits can be suitable for him/her.

What is a Rider in Life Insurance Policy?

The rider is a term used in the life insurance policy, which is further involved in the term of coverage. There is an extra cost that may be added to the coverage; however, this is not the case every time. In regular life insurance policies, there is ample room for modifying the coverage and adjusting the deductibles.

  • Policyholders with special demands are often in need of riders to fulfill their demands.
  • If the life assured is related to a chronic disease, the facility of the accelerated death benefit in the life insurance plan can offer the person a certain cash benefit at the time of living.
  • To pay off the living expenses or purchase medicines, this rider benefit can be used in a discretionary way.

After the demise of the life assured, the life insurance policy beneficiary gets a reduced amount of death benefit. It is to note that the requirements can change over the course of time and insurance companies can offer extra riders to modify the life insurance policy by including different kinds of additional coverage.

What are the Types of Life Insurance Riders?

Various types of life insurance policy riders can be suitable for the varying needs of the customers:

1. Accidental Death Benefit

ADB or accidental death benefit rider in a life insurance policy can be chosen if there is an occurrence of passing away due to the accident. The sum assured amount of ADB can be paid along with the regular death benefit.

Therefore, if the amount for a basic sum assured following life insurance policy interest is Rs. 25 lahks and the life assured has already included an ADB facility of Rs. 10 lakh, the settlement would be Rs. 35 lahks. However, it should be remembered that the life insurance policy benefits in this particular case can be applied if an accident takes place resulting sudden demise of the policyholder.

2. Accidental and Accident Disability Death Benefit Rider

For your life insurance policy, ADDB can be added as accidents do not result in death all the time, and the life assured can suffer from disability instead. It is important to check whether your life insurance policy enables the rider to benefit from partial or full disability. Some policymakers offer a waiver of premium benefits and policy can go on even when the premium for the basic life insurance policy remains unpaid,

However, to assure yourself of the benefit, you should contact the insurance agent to know how the ADDB will be applied to your policy.

3. Critical Illness Rider

This one is also known as a dreaded disease rider and major surgical assistant rider, a critical illness rider provides extra cover for the critical illness. The additional cover in the life insurance policy is equal to the basic sum assured and can be given out at the time of diagnosis. This could be used to help cover the cost of hospice Cleveland, or home nurses if the diagnosis is terminal. However, the coverage differs in every policy and the life assured can gain coverage on coronary artery bypass, paralytic stroke, cancer, major organ transplant, and renal failure.

  • After acquiring authentic life insurance policy information, you may not think of getting a different health plan. Managing or paying premiums for two policies can become messy since there is only one life assured involved.
  • It is important to check life insurance policy exclusions as many of the policy agents can discard the base policy if there has been a claim under a rider.
  • When the life insurance policy provides life cover continuously, you can pay for high premium for the rider.

Also read: Benefits of Life Insurance

Benefits of Life Insurance Riders

Apart from the popular ones, other riders can be added to your life insurance policy to cater to your financial goals.

  • Women CI Rider: Through this rider, the female insure can get coverage on critical diseases. When the life assured is diagnosed with listed critical health conditions, a specific percentage of the sum assured will be given out.
  • Guaranteed Insurability Option Rider: GI can be included in your life insurance policy when the requirements change with time. As there are more liabilities involved, you can improve the life cover. Ensuring insurability, the extra insurance at various life stages without undergoing medical tests can be helpful for many.
  • Income Benefit on Accidental Disability Rider: As disability can leave an impact on the income of the insured, IB offers monthly income for financial security.

Things to Know Before Taking Life Insurance Riders

After going through the life insurance plan rules, you can understand that the Insurance Regulatory and Development Authority of India has instructed that the premium for the riders altogether should not be more than 305 of premium. The sum assured amount received from the rider cover should not go higher than the basic sum assured on the policy. At the end of life insurance policy terms, the rider cover also matures and ends.

As the perils of life are rapidly growing during the 21st Century, a life insurance policy is completely necessary for offering financial security to yourself and your family. With the additional rider benefits, the perks of life insurance are accelerated instantly. You can go through the official website of the insurance policies to collect detailed information on the riders’ benefits. It is always best to opt for the one that can cater to your demands and needs with ease.

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.


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