Life insurance riders are additional coverages that can be opted at the time of policy purchase or renewal. A typical life insurance policy gives protection only from one type of risk i.e., loss of income due to death. The Riders strengthen the policy further by covering multiple other risks at a minimal price.

Types of Life Insurance Riders

Life insurance companies provide a wide range of life insurance riders providing different benefits and protecting insured from variety of Risks. Explained below are commonly used riders in Life Insurance plans.

1. Accidental Death benefit Rider: There is one death every four minutes due to accident in India. Accidental Death Benefit rider offers sum assured plus rider benefit to the nominee in case of accidental death of the life assured. Thus, offer enhanced financial support to the family members of the insured. People who work in dangerous conditions or people who travel frequently for business purpose or otherwise should take this Rider. It offers a sizable additional cover at a relatively low cost.

2. Accidental Disability Benefit Rider: While the loss of loved one is certainly more emotionally devastating to the family, a long-term disability can be more financially devastating. Some have referred to disability as “the living death”.Accidental Disability benefit rider provides the rider benefit to the life assured in case he/she suffers partial or permanent disability caused by an accident, which disables the life assured to earn a living and pay the due premiums. Most policies pay the disabled policyholder the certain percentage of sum assure in lumpsum whereas some policies pay regularly for next five to ten years following the accident caused disability.  Usually, this rider comes along with the Accidental Death Benefit rider.

3. Critical Illness Rider:Critical Illness rider is the most preferred rider because Critical illness can dry out a person’s finance rapidly and the cost of treatment sometimes is beyond the limit of your health policy, so it is best to have critical illness added along with base policy. This rider covers major critical illnesses such as heart diseases, tumours, cancer, strokes, paralysis, kidney failure, organ failure, etc. Critical illnesses Rider gives an upfront lumpsum payment on the diagnosis of any of the critical illness covered under the policy regardless of the overall expense paid during the actual medical treatment. It is also advised for people consume tobacco or alcohol on a regular basis.

4. Waiver of Premium Rider:Under a waiver of premium rider all future payable premiums get waived off in case the life assured suffers disability caused in an accident and in certain policies even in case of specifically defined critical illness, disabling the life assured to pay future premiums for their life insurance policy. This rider lets the life assured to avail of the policy benefit even after receiving the waiver of premium rider benefit. Waiver of premium rider usually comes with Accidental Total and Permanent Disability rider or with Critical Illness rider.

5. Income Benefit Rider: Under income benefit rider the policyholder’s family gets a pre-decided number of monthly instalments which is equal to the monthly income of the life assured along with regular sum assure in case of an unfortunate death of the life assured during the policy term. This rider will help the life assured to ensure that his/her family members maintain a healthy lifestyle even if he/she is not around.
6. Accelerated Death Benefit Rider:Under Accelerated Death Benefit Rider, in case the life assured is diagnosed with a terminal illness, the insurance company shall provide a part of the sum assured amount in advance. The amount receivable can be used for the treatment of the life assured. In case the life assured passes away due to terminal illness such as cancer, heart ailments, kidney failure, paralysis, etc. during the policy term then the remaining sum assured shall be provided to the family of the life assured.

Life insurance policies come with a vast range of additional riders. A few of them which are commonly opted for are mentioned above. Each rider covers different type of risk and solves a different purpose according to its features. It is important to identify the suitable rider for you so as to have the right risk covered at the end. Keep your specific requirements in mind and see which of the rider is in line with them. it is also important for you to make a wise decision keeping the cost of rider in mind before you actually buy.

If needed, sit down with a Qualified Financial Planner to evaluate the benefits of riders and then buy the one best suited to you and your family.