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Enriching Your Policy Understanding 7 Most Useful Life Insurance Riders

It is important for all of us to have a life insurance policy but what matters the most is the coverage of it. A basic life insurance policy provides financial assistance in case of untimely death of the policyholder. But what if you get caught in an accident and become permanently/partially disabled. And if you are the sole bread earner of the family then this will add up more to your problems. But if you have an Accidental Permanent Total/Partial Disability Rider then you need not worry in such a situation as the insurance company will help you by giving staggered payments. Therefore it is suggested that you purchase riders also along with the basic life insurance policy.

A rider is an add-on provision to a basic insurance policy that provides additional benefits to the policyholder at an additional cost. Riders give you additional benefits that are not covered by the basic life insurance policy. These come into play on the occurrence of a specific event and offer financial cover over and above the basic sum assured in a life insurance policy. Even with the occurrence of the event, the life cover remains intact. Generally, riders  have opted for the time of taking the basic policy. Some insurers may allow adding the riders at a later date also if stated explicitly in the promotional material. Following are the riders that can be purchased along with the basic life insurance policy:

  1. Accidental Death Benefit Rider

There are some things on which none of us has control on, like accidents. Losing someone in accidents and dealing with the loss of the loved one can be difficult for the family. Insurance is a way to protect your family from such uncertainties. The Accidental Death Benefit Rider covers the risk of death due to an accident. The rider provides additional benefit over and above the basic sum assured of the policy. If the policyholder dies due to an accident, then 100% of the rider sum assured is paid with basic sum assured. This rider ensures that the family of the deceased is able to cover all of its expenses after the loss of the deceased.  There is no maturity benefit available in accidental death benefit rider.

  1. Accidental Permanent Total/Partial Disability Rider

In case you have an accident and you become permanently or partially disabled then it will not only have an effect on you but also on your family. In case of disability, the individual can be impaired to such an extent that he/she may not be able to work anymore and earn the income to support the family.  And if the individual is the sole earner in the family then it might be difficult for the family to meet their expenses.  Accidental Permanent Total/Partial Disability Rider can become a savior for you in such a situation by providing payments of benefits periodically, waiver of future premiums etc. These payments are generally a certain percentage of the total sum assured (10% or more in most cases), and ensure that you can meet your financial requirements even if you are partially or permanently disabled.

  1. Waiver of Premium Benefit Rider

On total and permanent disability due to an accident, critical illness, or death of insured all future premium for both base policy and rider are waived till the end of the term of the waiver of premium benefit rider. This rider ensures that your life insurance policy stays effective even though you are unable to pay your future premiums due to the occurrence of untimely death, accidental permanent total disability or critical illness. It ensures that your policy does not lapse even if you are unable to pay premiums. This rider helps to keep your policy effective as per its original terms.

  1. Critical Illness Benefit Rider

Medical expenses are increasing at a very fast pace. We are all prone to contracting medical conditions from time to time. And meeting medical expenses can be expensive. Critical Illness Benefit Rider can help to reduce such unnecessary expenditure. A basic life insurance policy does not cover this but if you take this rider then in case you acquire any illness then this rider will help you to meet the medical expenditure without overburdening you with these expenses.

This rider protects the insured in the event of diagnosis of acritical illness during the term of the policy. If you fall sick due to any listed critical illness then the rider provides for the payment of the additional benefit in one lump sum or periodical payments. The most common critical illness that covered are:

  • Cancer
  • Heart Attack
  • Kidney failure
  • Paralytic Stroke
  • Cardiac Surgery
  1. Family Income Benefit Rider

The Family Income Benefit Rider as the name suggests provides protection to the income for the family in case of untimely death, permanent/partial disability, or critical illness of the sole earner of the family. In case the sole earner of the family dies or is permanently or partially disable then the family of that individual should not suffer and it should not hamper their income flow. The Income Benefit rider is perfect for those individuals who want to ensure that their family’s lifestyle remains unaffected in case of their untimely death. In case of death, a fixed % of the rider sum assured is paid annually or monthly to the beneficiary, on the policy. By purchasing this rider you can be financially secured that your family would not face financial problems in case of your untimely death.

  1. Guaranteed insurability option rider

This rider is useful for those who want to increase their insurance cover without going through medical examinations, whatever their state of health is at that point of time. This is perfect for young individuals who want to have an additional insurance at various stages in their life, like when one gets married or have children. These individuals have lower income in the beginning but when their income increases they purchase additional insurance as per their needs.

  1. Term Rider

The term rider provides additional benefit along with the life insurance coverage.to enhance the death cover on the policy.in case the policyholder dies during the term of the policy then the rider provides payment of additional benefit over and above what the basic policy covers.


Pragati Rajoria

Pragati Rajoria

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About Me

I’m a Commerce Graduate & CFP Professional, engaged in blogging since 3 years. I’m not affiliated with any financial product. The purpose of writing blog is to spread financial awareness and help people in achieving excellence for money. Please note that the views expressed on this Blog/Comments are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion.

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