What Are The Role Riders In A Life Insurance Policy?
Published On Oct 18, 2021
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Life insurance plans are the emergency backup for emergencies which have major financial consequences like, untimely demise. For a family, losing the breadwinner can be financially devastating. It can put them back on their social and financial status, and life insurance gives them the financial strength they need to stay afloat.
Unfortunately, there are many causes which can interrupt their financial wellbeing, and that’s why most life insurance plans including the term insurance plans will give you the option of riders.
Insurance rider is an additional insurance cover which you can add to your base policy. For example, when you buy a term life insurance plan, the term plan is your base policy.
Important Roles Riders Has To Play
Insurance riders add more stars to the safety rating of your basic term life insurance plan. But that’s not all, there are more benefits to them:
The most important reason for you to add riders to your life insurance policy is that you want your family safe from more than one hazard. Death is no doubt the ultimate cause for a family’s financial difficulties. But, accidental disabilities, life-threatening illnesses with expensive treatments are also equally devastating if not more. Adding riders to your life insurance plan certainly adds more teeth to it and protects your family better.
Added riders also increase your total protection pool. For example, if your base life insurance policy has a sum assured benefit of Rs. 1 crore, you can add Rs. 25 lakhs more with a critical illness rider. This is an important benefit of riders, as in many cases like accidental deaths, long hospitalization and medical expenses may precede the ultimate demise. Thus, your family will need a lot more money than just the death claim to look after everything.
If you end up suffering from a critical illness or accidental disability, the life insurance riders covering these risks will provide financial assistance. But it also means that your income will suffer, and you’ll be dependent on your insurance money for treatment and household budget. To avoid your life cover from lapsing, you can opt for a premium waiver benefit. So, whenever you submit a claim for critical illness or disability, your life cover may continue without any additional premium payment.
Minimal Management Hassles
Riders work along with the base life cover. However, if you were to buy a separate accidental and critical insurance cover, you will not only pay more premiums but also, have more than one policy to manage. Another drawback of buying separate covers is that combined benefits will not be available.
For example, if you do not add the accidental or critical rider to your term plan, you are unlikely to get the premium waiver benefit. It is because these claims work as a trigger for the waiver of premium. If your policy doesn’t have these benefits you cannot add premium waiver benefits.
You should take extra care while looking at the maturity or expiry of the insurance plan. Few riders like critical illness insurance may expire before your base life cover does. Also, adding riders may not affect your overall life insurance eligibility, and you should ensure adequate value for them. Online term plans have made it very easy and pocket friendly to build an adequate safety net for your family and quickly.
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.