Insurance Riders

July 13, 2011 admin Insurance Riders

Riders are typically additional benefits that can be added to your base insurance policy to enhance your insurance cover at a relatively lower cost.
Some of the reasons why you should consider taking up riders along with your insurance policies are:
• Low Cost: Riders help you meet your needs for financial protection and enhance your insurance to cover certain specific risks at fairly affordable costs
• Continued base insurance coverage: Some of the riders offered are structured such that in the event of a ‘rider claim’, the benefits associated with the rider are paid out and just the rider coverage gets terminated while the base insurance plan coverage is continued.
• Option to Choose: You can pick and choose which rider suits you best from available options depending upon which specific need you are trying to address
Amongst the various kinds of riders available, here are some of the following that one should actively consider:
Accidental Death Benefit Rider: As the name suggest, this rider provides you with an additional cover in addition to the Sum Assured of your basic policy payable to your dependents / nominee in case of death due to an accident. Although restricted to death on account of an accident, this rider could be a very cost effective mechanism to make a significant enhancement to your risk cover at a low cost.
Accidental Disability and/or Dismemberment Rider: You could insure against disabilities arising out of an accident by opting for this rider. In case of an accident resulting in total or partial disability/dismemberment during the term of your base policy, a Rider Sum Assured will be paid out to you while your base life insurance policy continues to provide you with a life cover. Though some companies offer a disability benefit only in case of permanent disability; there are riders that offer permanent and partial disability benefit in the event of an accident (with certain clauses that vary for every insurer). This can be an important risk cover to mitigate the financial hardships associated with a sudden and unforeseen accidental disability.
Waiver of the Premium Rider:If a policy holder is under any circumstances unable to pay his premiums (falls seriously ill or dies), the policy still remains active. The time period of premium waiver might vary depending on various product terms and conditions. The premium on this rider is set in accordance with the premium being paid on the base policy and other riders, if any. This rider proves to be most beneficial in case the premium on the base policy is relatively high or in products such as Child Plans where the purpose of the policy is long term savings to secure your child’s future.
Critical Illness Benefit Riders: This rider provides coverage against certain critical illnesses. Though the number and type of diseases covered under these riders are limited, yet the one’s covered, like cancer, coronary artery bypass, heart attack, kidney/renal failure, major organ transplant and paralytic stroke etc.; are those with fairly high associated medical treatment and hospitalization costs. One of the attractive features under the critical illness benefit rider is that the policy holder gets an amount equal to the sum assured irrespective of the medical expenses on or after the diagnosis of the critical illness. A plan that continues to give an insurance cover while charging a marginally higher premium, is always better than the one’s which terminate the base policy once a claim is made on the rider.
Child education Rider: Available under child plans. Under this rider incase of unfortunate death of parent during the policy term, a monthly payout is provided to the beneficiary towards his cost of education till a certain age
Term Plus Rider: An additional Sum assured is provided in case of death to the nominee under this rider.

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