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What is the Significance of Riders in Life Insurance?

Updated On Nov 19, 2021

A rider in life insurance is like a supplement to an existing plan that provides additional coverage and risk protection. Basically, life insurance riders help in extending the coverage of the policy. Riders offer a range of coverage from child education to accidental disability and the list goes on. Riders are tailor-made and suited to the needs of the respective individual.

Riders become a feasible option alongside their range of coverage options. They are cost effective as they help you enhance the plan coverage significantly against the payment of a nominal premium amount. Moreover, they entitle you to tax exemptions. Having a sense of financial security is very important to an individual. Thus, life insurance riders are an extremely helpful option from a financial point of view. To find out the benefits and significance of purchasing Riders, read on.

Significance of Riders in Life Insurance

Following are the key reasons why anyone should purchase a rider on insurance policies -

1. Additional Coverage

By purchasing a Rider on an existing plan ensures the benefit of comprehensive coverage. For example, purchasing a Rider on medical insurance ensures that it meets the medical costs, household expenses, etc.

Must Read: How Can Term Rider Be Beneficial?

2. Flexibility

Another benefit of purchasing a Rider is that they are very flexible in nature. An individual has innumerable options to choose from as per an individual’s needs. From an individual point of view, it’s important to take note of the circumstances, age, gender, etc. So, it benefits the respective individual.

3. Cost Effectiveness

A Rider ensures comprehensive coverage without seeking investment in a new plan. Thus, this makes Riders cost effective and more affordable rather than investing in a new policy. By purchasing a Rider ensures greater coverage on an existing insurance plan at a cost-effective price.

4. Tax Benefits

Rider also provides us with tax benefits towards the amount paid on the respective insurance plan. For example, an individual may enjoy tax deductions under Section 80C of the Income Tax Act, 1961 on the amount paid towards an Accidental Death Rider. Furthermore, Section 80D of the Income Tax Act, 1961 offers benefits on the amount paid towards Critical Illness Rider.

Some Popular Riders Available With Life Insurance Plans

Under life insurance, individuals have plenty of options to choose from in terms of Riders to enhance coverage on their respective existing plans. Here are some popular add-ons which are offered by insurers.

1. Accidental Death Benefit Rider

This Rider ensures to provide the individual a fixed percentage of sum if they have been diagnosed and are undergoing treatment for life-threatening illness. This Rider offers the benefit of financial help towards getting treatment for the respective insured individuals.

2. Income Benefit Rider

This Rider ensures the insured individual takes care of the short and long term needs of their loved ones. Under this rider, the insured individual is entitled to receive a certain amount of income every year, for a fixed number of years, in addition to the amount provided under the base plan.

3. Accidental Disability Benefit Rider

This Rider comes into play when the insured individual has been rendered partially or permanently disabled following an accident. This rider becomes a source of income for the insured individual and their family as it ensures them with a fixed amount at regular intervals for a fixed number of years.

4. Premium Rider Waiver

This rider essentially waives off future insurance payments if the insured individual becomes financially incapable due to an emergency such as being diagnosed with a serious disease, becoming disabled accidentally, etc. The most significant benefit of this rider is that the policy remains in effect after the premiums have been waived.


A Rider is a good option to enhance the coverage on an existing life insurance in the long run. The comprehensive coverage ensures to address specific concerns on an individual-to-individual basis. Therefore, an individual may avail the Rider option that suits them.

Also Read: How Riders Help You Support Your 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.

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