Riders are additional benefits, which are optional and insured persons may opt to avail such benefits by paying extra premium.
Insurance covers risks like – risk of early death, risk of living too long, health risk, risk of accidental injury or death etc. However, in some instances, some incidents may not result into insurable events that would lead to payment of claim amounts to policyholders or their nominees, but may seriously hamper policyholders’ ability to work to generate income. In such cases, riders prove handy to provide partial relief to policyholders either by waiving further premium or by providing partial claims or both.
Riders are additional benefits, which are optional and insured persons may opt to avail such benefits by paying extra premium. The premium for riders are generally lower than the premium of the full-fledged policies containing such benefits.
Riders may be of different types – Critical Illness, Disability, Accidental Death, Premium Waiver, etc.
Critical Illness Rider
Critical illness rider are offered with both life insurance and health insurance. If opted along with life insurance, insured persons are exempted from paying further premium after they start suffering from a specified critical illness, like cancer, heart disease, kidney failure etc. Apart from premium exemption, insurers may also start paying death benefits in installments depending on terms and conditions.
In case of health insurance, if opted for, the insured persons get full Critical Illness Sum Assured if they survive one month after first diagnosis of any of the specified critical illness.
If opted for, the life insureds may get benefits of exemption in paying further premium depending on the extent of disability they suffer following an accident. They may receive part of death benefits as well as temporary relief, which may be paid in lump sum or in installments.
Accidental Death Rider
As the name suggests, life insurance companies usually pay double the basic sum assured (SA) if death occurred due to accident, provided the life assured opted for the rider and paid the additional premium for it. However, total benefit under this rider can’t exceed the statutory limit, taking together all the life insurance policies in his/her name.
Premium Waiver Rider
This is an important rider related to children-oriented life insurance policies. According to this rider, insurance policy of a child would continue without paying further premium in case of unfortunate death of the earning parent. So, this rider would ensure that the goal of the insured child would not go unfulfilled even after demise of the parent, who was supposed to pay the premium.
So, riders are quite useful as they provide crucial benefits at the time of need with marginal increase in premium.