These riders are nothing but additional covers such as term rider, accidental death and disability rider, waiver of premium rider, critical illness rider, etc., offering benefits beyond the conventional insurance policy.
In life insurance, your plan can be tailored to fit your financial needs. While there are various insurance plans including term plan, traditional savings plan, unit-linked, health insurance and pension plan available on the life insurance platter, these can be supplemented with various riders to customise your life insurance package.
These riders are nothing but additional covers such as term rider, accidental death and disability rider, waiver of premium rider, critical illness rider, etc., offering benefits beyond the conventional insurance policy. These riders can be availed at the inception or at the time of paying the yearly premium.
If you think the insurance component of the policy you are looking at is insufficient, then term rider can help you double your life cover by paying nominal extra premium. Riders need to be opted for at the start of the policy, but if one feels the need to increase the cover owing to some life events such as marriage or child birth, adoption, etc., one can add a rider at subsequent policy anniversaries. Instead of purchasing a fresh cover to increase the sum assured, a relevant rider would help increase the coverage in an efficient manner and in tune with your needs.
Accidental Death and Dismemberment
Those who don’t have a standalone personal accident policy and are seeking an easier option can use the Accidental Death and Dismemberment rider over and above the life insurance cover under their policy.
In the course of one’s life, unforeseen accidents may happen that can prove fatal, causing disability or even untimely death. This can adversely affect the family’s financial well-being. Such emergencies require lump sum financial assistance to overcome the trauma. Specific riders like Accidental Death and Dismemberment rider, can help fill the financial gap for the family in case tragedy of either nature strikes.
Waiver of Premium Rider
A disability can cause serious financial strain on a family. The new unexpected expenses, as well as paying life insurance premiums can become a struggle. The inability to pay life insurance premiums each month could also result in cancellation of the coverage. The waiver of premium rider acts as the saviour if the insured is permanently disabled due to accident or sickness. All the future premiums of the base plan are waived for the rest of the premium paying term of the base plan and all future benefits would continue under the policy.
Critical Illness or Cancer-specific riders
Death is not the only eventuality that people dread; it is also the fear of major illness or disease that is a cause for worry. Critical illness riders have been designed to ensure that lack of money does not hamper or delay the treatment of diseases, for instance, heart ailments, cancer, kidney failure, etc. A lumpsum benefit based on the disease and the sum assured opted for the rider is handed over to the insured upon detection of the disease. Unlike mediclaim, one needn’t produce treatment bills to make a claim as the lumpsum is paid out irrespective of the amount spent on treatment.
The base policy must always be in force for the rider to be active. While riders can be added to offer better coverage, they also come at a nominal extra premium. But these riders offer the benefit in a cost-efficient way too. For instance, if one were to buy a personal accident and disability cover separately one would have to shell out much higher, but the same can be purchased at a fraction of the cost through a rider.
(The writer is chief strategy officer, Tata AIA Life Insurance. Views are personal.)