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What Does A Rider Mean In A Life Insurance Policy?

Published On Jun 24, 2021 1:00 PM By InsuranceDekho

In today’s rapidly changing world where life can’t be guaranteed and is uncertain, any single mishap might bring the life of your loved ones to a stand still. To ensure that the family is always financially stable, having a source of income, mainly life insurance, is the need of the hour. However a single policy might not be enough to cover all your needs. Riders are useful in such cases. 

What Does A Rider Mean in Life Insurance?

An insurance policy rider is a supplement or addition to a pre-existing insurance plan that provides additional coverage, and risk protection. Riders are cost-effective add-ons that you may purchase in addition to your current term insurance policy to increase your life insurance coverage. It is an additional plan which is added to the base policy to increase its coverage. 

Riders come in a variety of forms, ranging from standard health care to critical sickness, accidental death or incapacity, cash for your child's education and/or marriage, and so on. Riders can be incorporated to any insurance policy, including term, endowment, money back, and unit-linked policies. It is tailor made according to the needs and requirements of the insured person.

Must Check:- Term Insurance Benefits 

Benefits of Life Insurance Riders

Many small and big investors prefer investing into cost efficient riders instead of new insurance plans because riders cater to your needs in the most convenient manners. 

  • One Policy And Multiple Benefits

Once you know how flexible riders are and that you can directly add them to your pre-existing policy without much hassles, you will give up on the thought of buying different new policies and rather invest into comparatively cheaper and better options- riders. Now that you will have a single policy with riders as per your needs, you will have to manage only a single policy and you will be able to give proper attention to it. This will also reduce the hassles you will have to face in management of your policies.

You may also like to read:- Advantages of Adding Riders To Your Term Plan  

  • Customize Your Policy According To Your Needs

Riders are custom and tailored additions to your policy and you can personalize them according to your needs. You can choose the time period for the riders and in fact in between the term period, you can choose to get out of the plan or enjoy it's benefits, add to it or remove some features. 

  • They Provide Extra And Enhanced Protection

Riders are supplements to your existing policy and you can keep on increasing them as per your needs which will keep increasing the cover of your policy and eventually increase the maturity benefits. One principal aim of introducing a rider to your term insurance policy is to protect your family's safety. A term plan's death benefit is reasonable, but it will be worthless if you are disabled in an accident that renders you unable to maintain your family financially. When riders are added to a term plan, they significantly improve protection of all hazards.

Must Check:- Term Insurance Company 

  • Enjoy The Special Benefits Of Riders

Riders come with many special benefits such as premium waivers in case of any emergency where you are unable to pay the premiums further and return of premium option in case you need emergency cash due to any mishap. 

  • Rebate In Income Tax

Riders not only help you save your hard earned money directly by not investing into stand alone policies but as well as by saving your taxes according to sections 80C & 80D of the Income Tax Act of India. You can save upto Rs. 25,000 in total every fiscal year on income tax by investing into riders instead of policies.

Also Read:- Important Term Insurance Riders And Their Benefits  

Take Away

A Rider is a customized addition to your policy which will help you strengthen your policy in the long term by enhancing the coverage and protection of your plan and securing your family's future. 

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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