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8 Life Insurance Riders You Need To Know

Riders are optional features of life insurance policies, which enhances the base plan coverage at an affordable price. Moreover, the right choice of life insurance riders would help your family at the time of claim. Life insurance provides life coverage, which provides complete protection against the risk of death. Riders are the paid features that you can add to expand the scope of your life insurance plan’s base coverage.

8 Most Common Life Insurance Riders

Following are the 8 most common rider options in life insurance - 

1. Accidental Death Benefit Rider

In case of an accidental death of the life insured, the insurance company will pay the sum assured plus the rider benefit to the nominee. In many incidents, an accident may not directly lead to “on the spot death,” and thus, most of the companies include a duration after the occurrence of the accident to extend the given cover. For instance, if the insured dies within 180 days of the occurrence of an accident, the nominee still gets the sum assured money. It is important to see such details before choosing riders and also compare from different insurers.

2. Accidental Total and Permanent Disability Rider

If due to the accident the life insured suffers total permanent disability - losing legs and arms, consequently, forcing one to leave work, this rider will help with the cash flow. In such an unfortunate event, the insurance company gives the rider benefit to the life insured. The rider benefit varies from insurer to insurer and also on the sum assured of the base plan. Some companies pay a percentage of the rider benefit as a regular monthly income for 5 to 10 years. If the life insured dies during the tenure after suffering the disability, the nominee would get the outstanding sum assured or as the rider condition dictates. Most of the time this rider is attached to the Accidental Death Benefit Rider.

3. Critical Illness Rider

It covers major critical illnesses like heart attack, cancer, stroke, kidney failure, paralysis, coma, etc. It is important to check the list of illnesses covered as it varies for different companies. Because the insurance company pays the rider benefit once the critical illness is diagnosed. Any of the listed Critical Illnesses may not lead to death, immediately. But, that could leave the insured out of work and break in the income flow. With the help of this rider, the life insured is compensated immediately. Thus, the money can be used for monthly expenses and also for medical treatments. Some insurance companies pay 100% of the sum assured on diagnosis. It is however paid if the life insured survives the waiting period of 30 days after the date of diagnosis.

4. Waiver of Premium

In case of a vanilla life insurance plan, if the life insured suffers any disability because of which he/she is unable to pay any future premiums, the policy terminates. Here, all your future premiums will be waived off, and the policy will continue to be in existence. It may also be the case if the proposer is different from the insured. If the future premiums cannot be paid because of the accidental disability or death of the proposer, then the premiums for the base policy and riders will be exempted, but your policy will continue.

5. Accelerated Death Benefit Rider

In a case where the life insured is diagnosed with a terminal illness, such as Cancer, Leukemia. AIDS, Ebola, etc. which shortens the lifespan, this rider is the rescuer. In such a case where the life insured is diagnosed with a terminal illness, the insurance company pays a part of the sum assured in advance. This can be used by the insured for the treatment. This one-time lump sum payout on diagnosis can be set at the time of purchase. The rest of the money is paid to the family after the passing away of the insured so that the family stays financially secured.

6. Term Rider

Offers lump sum or monthly income to the nominee in the event of life assured death. The rider benefit can be equal to the base plan coverage or a predetermined value defined in the life insurance policy.

7. Hospital Cash Rider

A fixed benefit per day of hospitalization is paid in case of hospitalization. The benefit amount, minimum and maximum sum assured, terms and conditions differ from insurer to insurer.

8. Surgical Care Rider

If you are undergoing a surgery in India which can't be avoided, a lump sum benefit will be paid. The benefit may differ from one type of surgery to another. The coverage varies for minor and major surgery cases.

Take Away

Riders are optional, but the power with which it comes is what matters. This kickstart guide to choosing the life insurance riders will help you to decide the right type of riders and secure your family. If you have dependents counting on you for their livelihood and other life activities, it goes without saying that you need life insurance with riders. You must choose the right riders as per your requirements and conditions.

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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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