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Why Do You Need To Add Riders To Life Insurance Plans?

Published On Jul 10, 2021

If you have beneficiaries who would be financially unable to support themselves if you died suddenly, life insurance is necessary. This manner, even if your money is no longer available, they can maintain the lifestyle they have grown accustomed to. Life insurance is more than simply the basic coverage. Riders can be added to life insurance plans to give additional benefits that are tailored to your specific needs. While certain riders are included with the policy at no additional cost, some must be purchased separately.

A rider to a life insurance policy is an additional or supplementary plan to an existing insurance plan that provides additional coverage and risk protection. Riders are low-cost additions to your existing term insurance policy that can be used to increase your life insurance coverage. It is an add-on policy that supplements the standard policy's coverage.

While a rider is just as beneficial as purchasing a new policy, it is usually a very cost-effective way to get the most coverage out of a plan. Various combinations of riders with pure term insurance will not only provide for your family after your death, but a rider will also guarantee that if you suffer from any form of physical impairment as a result of an accident, the rider sum assured will keep you afloat in difficult times.

Advantages of Adding Riders To Life Insurance Plans

Many small- and large - scale investors tend to invest in cost-effective riders rather than new insurance products since riders fit their requirements in the most convenient ways.

1. One Policy And Multiple Benefits

When you finally realise the fact that how cost effective and adaptable riders are and how easily you can add them to your existing policy, you'll leave the idea of buying several new policies and instead invest in comparably cheaper and superior options- riders. Now you will be having only a single policy with riders tailored to your needs, you will only have to handle one policy and will be able to devote your whole attention to it. This will lessen the burdens and headaches you'll have to deal with when managing your insurance.

2. The Policy Can Be Customized According To Your Needs

Riders are customised and specialised additions to your policy that you can change to match your individual needs. You can choose the time period for the riders, and you can opt out of the plan or continue to enjoy its benefits during the term duration, as well as add or delete specific features.

3. Riders Provide You With Enhanced Cover

Riders are enhancements to your existing policy that you can add to as your needs dictate, increasing your policy's coverage and, eventually, its maturity benefits. One of the most important reasons to add a rider to your term insurance policy is to ensure your family's safety. A term plan's death benefit is adequate, but it is pointless if you are injured in an accident and are unable to maintain your family financially. Riders, when added to a term policy, significantly boost protection against all risks.

4. You Are Eligible For Income Tax Rebate 

Riders not only help you in preserving your hard-earned income by not investing in stand-alone insurance, but they also help you save taxes under sections 80C and 80D of the Income Tax Act of India. Hence, instead of investing in separate policies invest into riders and you can save up to Rs. 25,000 in total income tax every fiscal year.

Take Away

Riders assist you in enhancing the coverage and protection of your initial insurance plan, making you qualified for substantial income tax rebates. You don't need to invest in many policies when you have riders in your policy, which saves you time and money on administration. 

Also Read: Know All About Critical Illness Rider

Are Life Insurance Riders Worth It?

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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