5 Common Questions Asked About Life Insurance Riders

Growing older by becoming an adult entails taking on more responsibilities, a big portion of which is financial. We all know the importance of having a strong financial strategy, and life insurance should also be a crucial component of that plan. Why? Because life is inherently unpredictable. Existence insurance functions as an efficient cover in such times of loss of income to safeguard your family and loved ones from the eventualities associated with human life, such as death, disability, accident, and so on, as well as for retirement planning. We all run the danger of dying too young or living too long, and life insurance plans provide us with a financial safety net in any situation.

Sure, you can't put a price on a human life or the effect of its loss, yet life insurance can assist you avoid financial problems in these situations. In the unfortunate case of the policyholder's death, injury, or incapacity, life insurance operates as a contract to compensate the policyholder's beneficiaries with a predetermined sum assured. It's reassuring to know that your family will be taken care of even if you're not around. To find out about the common queries regarding riders, read on.

What Are Some Of The Common Questions About Life Insurance Riders?

Following are some of the common questions about life insurance riders -

1. Why Does A Person Need Life Insurance Rider?

Life insurance is a straightforward financial product in which you pay a premium to the insurance company, and in the case of your untimely death, your nominees — your spouse, children, or other loved ones – get a lump-sum payment known as the sum-assured.

2. What Are The Advantages Of Having Life Insurance Rider?

• It serves as a source of financial stability for your family.
• It safeguards your child's future by covering the fees of school or marriage.
• If you have outstanding loans, your family will not be responsible for repaying them if you pass away unexpectedly.
• Your retirement might be protected with a life insurance rider. You can choose a unit-linked insurance plan (ULIP) based on your life objectives, such as the Bajaj Allianz Life Goal Assure, A Unit-linked Non-Participating Life Insurance Plan, which puts your life goals at the centre of its offering. You may choose from eight funds, four investment portfolio strategies, and loyalty additions (for yearly premiums of Rs.5 lakhs or more for a policy term of 10 years or longer) starting in the sixth year, as well as a Fund Booster (for a policy term of 10 years or longer) at maturity. On maturity, it also refunds the mortality or life cover charges. To obtain detailed information, one can consult the product's sales brochure.

3. What Will Happen If I Can't Get Life Insurance?

If this occurs, you should investigate why the application was not processed or accepted. Health, wealth, where you live, a risky hobby or employment, and other factors might all play a role in your inability to get life insurance.

4. What Is The Recommended Range Of Age For Purchasing Life Insurance?

When you are younger, particularly in your 20s, is the best time to get a life insurance plan. In turn, to get riders. You are normally healthier and represent less risk to an insurance company while you are younger, hence why you would be offered the most reasonable rates.

5. Are there any tax advantages to purchasing life insurance riders?

Yes, they do exist. The tax advantages of life insurance riders apply to the premiums. You can deduct the premiums you pay for a life insurance payout as a tax break under Section 80C of the Income Tax Act of 1961, which permits you to deduct up to Rs.1.5 lakh each year. Under Section 10(10D) of the Income Tax Act, the sum insured was likewise totally tax-free.

Endnotes

Always make absolutely sure that you and your family's financial goals are matched with whichever life insurance you purchase. Also, be sure you're not underinsured by choosing a lesser sum-assured than is required in your scenario.

Also Read: How beneficial is critical illness rider in life insurance?

Know The Importance Of Riders In A Life Insurance Policy

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.