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Type and Benefits of Insurance Riders

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Type and Benefits of Insurance Riders
November 05, 2023

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An insurance rider is an add-on to the policy that an investor undertakes. It offers additional benefits apart from the usual benefits of the ongoing policy and is subjugated to certain terms and conditions. It is a means to maximize the benefits of life insurance plan to customize the policy to suit the investor's personal needs. A rider is a crucial tool to expand your life insurance coverage. A rider might have an additional charge associated with it in most cases over the standard cost of insurance while it is also the possibility that you would get a free rider. A rider can be added before or after the policy is issued. The ability to add a rider after a contract is signed depends on the specific rider rules, which may vary from company to company.

Various riders as per your requirement

  • Critical illness rider

Under this category the investor needs to pay an extra amount to cover herself / himself in case the person is diagnosed with any critical ailments such as cancer, heart attack and brain tumor. This rider acts as an income replacement plan and the amount received under the rider can be used to meet both medical and household expenses.

  • Disability rider

This rider is beneficial in case of permanent or temporary disability owing to an accident. Generally the insurer pays a certain sum assured for the next five or ten years in such situations. Also, all future premiums on the main insurance policy are waived off by the insurance company.

  • Accidental death benefit rider

All life insurance plans cover accidental death. However, when you buy an accidental death rider, the insurer pays double the sum assured to your nominee in case you die in an accident.

  • Term rider

This rider offers monthly income to nominee on death of life assured.

  • Waiver of premium rider

This rider ensures that your life insurance policy stays active even if you are unable to pay your premiums. The effect of this policy would be waiving off all future premiums but the continuation of the policy benefits.

Benefits of riders

By attaching a rider to a regular policy one can get the advantage of extra coverage to deal with household expenses, loan EMIs and for other financial liabilities apart from medical expenses. Investing in a rider is more affordable than investing in a regular insurance. Furthermore, riders also enjoy tax benefits as per the prevailing tax rules.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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