Ride the insurance wave with riders

Riken Mehta
Wednesday, 29 August 2018

What are insurance riders, how should you choose the riders? Here’s getting the answers to these questions

Life is uncertain and there’s only one way of combating this uncertainty — by taking insurance. Insurance is a way of protecting oneself against financial loss or other adverse circumstances.It helps you hedge any unseen risks by paying a small premium. As one can safeguard oneself and one’s assets from potential damage or loss, insurance has become the need of the hour.

In today’s article, we will focus on insurance riders and their importance while taking an insurance policy. An insurance rider is an additional benefit provided to policyholders along with the primary insurance policy, subject to certain conditions. Most of the basic policies provide additional covers for disability, accident and various illnesses which are called riders.  

You should opt for riders based on your personal needs since they can boost the basic insurance cover and secure the financial well-being of your family and your assets more comprehensively. Yes, one might have to pay an extra premium for additional riders, but some policies do offer them as part of the primary insurance policy. 

Let’s take a look at some of the basic insurance riders in detail.

Critical illness
It is one of the most important riders provided by insurance companies. Our life is uncertain, and we might, with age, contract varied medical conditions. Thus, a critical illness rider is an excellent benefit to help reduce unnecessary expenses in such a scenario.  

One should be aware that life insurance policies typically do not cover medical and hospitalisation expenses. So, if you fall sick, you will have to bear all costs related to your medical treatment despite having life insurance policy.  This rider not only ensures that you get additional financial support during hospitalisation, but also helps you to access quality medical attention without thinking of the financial burden. With this rider, treatments are neither ignored nor delayed due to financial crunch.

Partial and permanent disability
Any freak incident or fatal accident has the potential to render any individual disabled. In case of disability, the individual is impaired to the extent that s/he cannot even work and earn the income that s/he requires to support their family. 

A partial and permanent disability rider is the best bet in such cases as it provides staggered payments to the individual if s/he meets with an accident, which renders her/him disabled and unable to work. 

These payments are generally a certain percentage of the total sum assured (10 per cent or more in most cases) and ensure that you can meet your financial requirements even if you are partially or permanently disabled.

Accidental death
In case of accidental death of the policyholder, this rider will ensure that the individual’s family receives an additional payment. Although the basic sum assured will be paid out to the nominees upon the death of a policyholder, the rider provides the family with extra funds to ensure that they can manage all their expenses, thereby making it slightly less stressful to deal with the loss of a loved one.

Premium waiver
It is not unusual for policyholders to forget paying their premiums on time in the daily rigmarole of life. There can be many reasons for not paying regular premiums ranging from disability to unemployment. However, this rider ensures that the policy doesn’t lapse even if premium payments are not made on time. In fact, the rider will allow your premium payments to be waived off but the policy will continue as per the initial agreement.

Income benefit rider
As the name suggests, the income benefit rider provides regular income to the family of a deceased policyholder, and the amount payable to the nominees through such a rider is usually a percentage of the total sum assured. By purchasing this rider, a policyholder ensures that his/her family will be financially secure and have relatively lesser financial concerns to deal with in case of the policyholder’s death. 

Thus, ensure you make the most of your insurance policy by opting for the rider that best suits you and your needs.

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