Life insurance is an important investment if an individual is the sole breadwinner of the family with financial dependents such as children, a spouse, or senior parents to take care of. The objective of buying a life insurance policy is to ensure financial protection in your absence to your loved ones. However, sometimes the basic insurance cover is not enough. This is where an insurance rider comes into play. Insurance riders are a modification to your term plan that offers additional coverage by making a life insurance policy robust. The riders extend the borders of the coverage to include unfortunate eventualities aside from the finality of the policyholder’s demise. There are different types of riders in insurance to address the unique financial needs of each individual and come with conditions mentioned in the policy document.
Top 3 Riders in Insurance Policy
The insurance companies have a host of term plan add-ons to suit the requirements of insurance-seekers. However, the following riders are the most common options:
Waiver of Premium Rider
To get all the benefits of the insurance and to ensure that it does not lapse, the policyholder needs to pay the premiums in time. However, such a situation may arise where the policyholder in an unfortunate event like a severe injury or a critical ailment, is unable to pay the premiums. This is when a waiver of premium riders can come to rescue.
This rider waives thus off all future premiums while keeping the policy active if an accident renders the policyholder disabled. Following are the scenarios that will activate the waiver of premium rider:
Critical Illness Rider
If the policyholder is diagnosed with a critical illness that is mentioned in the policy, then this critical illness rider makes him/her eligible to receive a lump sum amount to pay for the medical expenses. This supplements the patient with a much-required cash flow at the time of recovery. This is one of the best life insurance riders if you want to ensure that a critical illness does not taint your savings and leave your family in a compromising scenario so you can focus on a speedy recovery.
Accidental Death and Disability Rider
An accident can sometimes result in partial or permanent disability, which can affect the ability to earn. A disability rider can act as an income supplement in the subsequent years so that the policyholder can continue to live comfortably. In cae the policyholder passes away due to an accident, the accidental benefit rider pays the family an additional amount over and above the death benefit of the basic term insurance policy.
Always request your insurance company or advisor about all the riders available at the time of considering the life insurance purchase. It is wise to acquaint yourself with the different types of riders in insurance and the associated benefits and inclusions and exclusions of each to make an informed purchase.
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