Riders That Help in Raising Your Protection Level

Sahil came back from his new job training all flushed and looking a bit tired as well.

His mother Susheela got him his tea and as he sat down to enjoy his bhajias in the monsoon weather, his father Rajnath too joined them.

“So how was your day at the Insurance Training Institute Sahil?”, he asked, smiling. Susheela remonstrated to Rajnath, “Come on Raj, the poor boy’s come home looking all tired. And you are reminding of his classroom sessions again!”

Sahil laughed, “It’s ok, Mom! It’s hardly hard work, it’s about how to live a sensible life. I’m so excited I’m becoming a Development Officer. Today, we learnt all about Riders to Insurance Policies and where they are applicable. Let me tell you about them in brief, it’ll be like a revision for me too, we have an evaluation about it tomorrow in any case.”

What is Life Insurance?

Life insurance protects you and the important people in your life from financial hardship. In fact, life insurance can be customized for your particular situation and lifestyle. Now, while there are various many types of term and permanent insurance, you also have policy  add-ons to supplement a life insurance policy with  more coverage.

These policy add-ons are referred to as riders.  Riders vary by insurance company and by policy, as do their workings and costs. Adding riders may increase your premiums so make sure to work out if the extra coverage is worth the cost. While there are many riders available, these are the most common:

Types of Life Insurance Riders

Term Rider

When purchasing insurance, you may add virtually any form of term insurance to a base permanent policy in the form of a term rider. This is beneficial to policy owners who have a temporary need in addition to their long-term need.

Waiver of Premium Rider

A waiver of premium rider ensures that you would not need to pay the premiums on your life insurance policy should you become totally disabled and can’t work. Most insurance companies limit the policy to age 65. If you are older than 65 and become disabled and are disabled for longer than six months, your premiums will be waived.

Accidental Total and Permanent disability rider

A disability income rider allows you to collect regular income from the insurance company if you become totally disabled and can’t work. The policy will specify the amount of income and how long it will be paid. Some riders only pay if you became disabled from an accident, while others pay for an accident or illness.

Critical Illness Rider

The critical illness rider requires the insurance company to pay you a lump sum if you’re diagnosed with one of the critical illnesses specified in the insurance policy such as: cancer, heart attack, stroke, kidney failure and others. Not all policies offer this rider; you might have to take a critical care policy separately.

Accidental Death Benefit Rider

The accidental death benefit rider or double indemnity rider increases the death benefit if you die as the result of an accident. Sometimes this rider also includes additional payment for dismemberment; you would collect money if you lost a limb or your sight.

“This seems so confusing, there are so many riders”, said Susheela.

“Mom, I have spoken here only about the most common types of life insurance riders, there are many more types. You see, there are so many factors to consider when shopping for life insurance. The amount and type of life insurance riders you can opt for, depends your income, your dependents, debt, lifestyle, and how much risk you are willing to take’, said Sahil, and added, “Wow, that was really like a refresher before my test tomorrow. I am sure I shall do very well indeed in it, thanks!”