What are the different types of riders in Life Insurance Policy?

As we know that term insurance (What is term insurance?) is pure form of insurance and it comes with the maximum cover for your life. But, it doesn’t offer any attached riders while taking the policy. In our previous article we have understood what is life insurance riders?. The riders provide the additional benefits to the policy holder in case of unexpected things happened in his life. In this article I will explain the different types of riders in the life insurance. These riders are not only for term insurance, any product which offers the life insurance. Subscribe to our future articles here.

Types of Life Insurance Riders

Accidental Death

This rider is taken to get the additional benefits for the family if the policy holder is died in the accident. Normally the amount the family will get is double the amount of  full coverage. For example, if the policy holder insured for Rs.500000, in normal cases his family will get only Rs.500000 after his death. But, if death is due to an accident, they will get Rs.1000000.

This rider is very useful and it gives the more protection to the family for the unexpected loss of family member. If you are a person who has dependents and travel more for your business, this rider is must for your life insurance.

Read: Difference between Investment and Insurance

Permanent Disability

In case if policy holder become permanently disabled, then this rider would give him the benefits. This rider is mainly for who survived in the accident and become permanently disabled. Thus, depending on the disability of the body or the part which has been severed, a part or whole rider sum assured is paid to the customer as a survival benefit, subject to terms and conditions.

For example, Mr. X has taken the life insurance for Rs.1000000 with accidental death benefit of Rs.500000. If he met an accident and survived with permanent disability, then he would not get any benefits if he has not applied for this rider. Policy holder can apply both, accidental death and permanent disability in a single rider. It is available with most of the insurers.

Critical Illness

It is another survival benefit to the policy holder. The definition for critical Illness would vary for each insurer. If the policy holder affected with serious disease and which is under the category of critical illness, then he would get the benefit if he is taken this rider with the life insurance policy. Since it is survival benefit, this would help the policy holder to meet the medical expenses.

The difference between medical insurance and the critical illness rider is that, in this rider, the policy holder would get the sum assured without considering the medical expenses.

For example, Birla SunLife Insurance covers the following diseases under this rider:

1. Heart Attack
2. Cancer
3. Stroke
4. Major Organ Transplant

The rider benefit will also cease when a claim is paid.

Waiver-off Premium

In cases where the insurer not able to pay the premium due to his Illness, permanent disability or any other injury which result in loss of income to pay the premium. In this cases, he/she need not pay the premium and the policy will not be lapsed. This rider is very useful when the premium amount is very high.

Under Section 80C, premiums up to Rs. 100,000 are allowed as a deduction from your taxable income each year.

Under Section 10(10D), the benefits you receive from this plan are exempt from tax.

Summary

The above are the four important riders coming with the life insurance products. It is very important that taking these riders with little extra amount would make big difference for you or your family when there is something unwanted disaster happened in your life. When you are taking the riders, please read it carefully to understand whether the rider would meet your needs. Because, if there is small mismatch then insurance company will reject the claim. If you have any doubts, please post it in the comments section.

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