Quite rightly named, insurance riders are tag-along policies that ride along with the essential life insurance. Riders are offered by mainly insurance companies, and add a few benefits to your life policy. Riders are planned to simply supplement your basic life insurance policy. Riders are, of course, optional, and just a way to improve benefits beyond those offered by your regular policy.
Note the key points about riders. One, they come with their own premiums in count to the premium you pay on your base life policy. Rider premiums are based on a fixed sum per thousand of the sum assured.
For example, in Reliance Life Insurance New Critical Conditions Rider, a 35-year-old male will have to pay Rs 5.06 per thousand of sum assured for a 10-year rider period.
Two, riders cannot be bought on their own, and have to be close to a regular life policy. However, riders and premiums may have differing periods of insurance and do not have to be the same as the life policy you have selected.
Three, once the benefit of the rider is availed of, they cease to be prepared, and you will not have to pay out the premiums.
For example, considering the afore-mentioned Critical Conditions rider, you can claim repayment for multiple surgeries and even in the same year, but only to the extent of the benefit stated in the rider terms.
Even if the rider is ended, your actual life plan remains unchanged, and will continue as it is.
Riders are available on life insurance policies, ULIPs or else. With child benefit plans, retirement plans, and pension plans, some providers do offer riders where others do not. For example, ICICI Prudential offers riders on its life insurance policies, but not on most of its retirement policies.
While the finer points of riders differ with providers, most primarily offer benefits on accidental deaths, disability (or a combination of the two), critical illnesses and surgeries and waiver of premiums.
Some providers offer all of these, but accidental death and disabilities benefits are consistently offered.
Accidental death rider simply provides additional cover in the case of death only due to an accident. There are a good many circumstances on what exactly
constitutes an accidental death, so be sure to take a careful look. Similarly, disability covers partial and permanent disability.
As far as critical illnesses go, the insurance providers specify those that they will cover. Within the specific illnesses as well, there are further terms and conditions that have to be satisfy, such as stage of the disease and soon.
Major surgeries are also provided for under some riders.
The third common rider is waiving of premium. This is an offshoot of disability, under which, should you be permanently disabled and thus be unable to meet premium payments, this rider will clear you of having to pay the premiums on your actual policy.
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