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Most Popular Life Insurance Policy Riders Explained

Updated On Dec 15, 2021

Life insurance helps protect the respective individual’s loved ones financially if they pass away. However, basic life insurance policies may not include all the coverage that an individual might need. To increase coverage, an individual may have the option to add one or more policy riders. Some riders are even included with some insurance, but not with others.

The primary purpose of a rider policy is to provide coverage when the scope of a standard life insurance policy is limited. Under some conditions, an individual may require personal accident coverage in addition to a life insurance policy. Rather than purchasing a new policy, the individual might combine an add-on insurance with a term plan. To find out some popular life insurance policy riders, read on.

Most Popular Life Insurance Riders

Following are some of the most popular life insurance riders -

1. Guaranteed Insurability Rider

This rider allows individuals to get additional insurance coverage for a set period of time without having to go through with a medical exam. When an individual undergoes a big change in their living circumstances, such as the birth of a child, marriage, or an increase in their salary, a guaranteed insurability rider can help. If an individual's health deteriorates as they become older, they will be able to seek for more coverage without having to provide proof of insurability. This sort of rider may also allow individuals to renew their base policy without having to go through a medical exam at the end of the policy's term. Riders who are guaranteed insurability may lapse at a certain age limit.

2. Accidental Death Benefit Rider

If an insured individual dies as a consequence of an accident, an accidental death rider pays out an additional amount of death benefit. Normally, the supplementary benefit paid out in the event of an accident is equal to the original policy's face amount, doubling the payout. The respective insured individual's family receives double the value of the insurance if the insured dies as a result of an unintentional bodily harm. This is why it's known as a double indemnity rider. If they are the lone breadwinner in their respective family, an accidental death rider may be the best option because the double benefit will cover their surviving family's expenditures.

3. Waiver of Premium Rider

Future premiums are eliminated under this rider if the insured individual becomes chronically incapacitated or loses their income as a consequence of an injury or disease before reaching a certain age. A household might be crippled if the main earner becomes disabled. The rider exempts policyholders from paying the base policy's premium until they are ready to work again under these conditions. A waiver of premium rider might be useful, especially if the policy's premium is expensive. The meaning of "completely handicapped" may differ from one insurer to the next, so one should be aware of the rider's terms and conditions.

4. Family Income Benefit Rider

A family income benefit rider will offer a consistent flow of cash to family members if the insured individual passes away. An individual must specify the number of years their family will get the benefit when purchasing this rider. The benefit of having this rider is self-evident: in the event of death, the remaining family will encounter less financial difficulties due to the rider's regular monthly income.

Endnotes

Most insurers do not enable an individual to personalise their insurance policy to meet their specific needs, but riders can let individuals do so. Before adding a rider to a life insurance policy, one should always go over the tiny print. And should also sit down with an insurance expert if necessary to assess the benefits of riders and then purchase the one that is best for an individual and their family.

Also read - The Role Of Riders In Enhancing Life Insurance Coverage

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.

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