Choosing the right rider for your life insurance policy

Let us look at the types of riders available, and who should ideally buy these riders Insurance.

A rider is a voluntary add-on that you can usually buy with life insurance. Some of the familiar riders are Accidental Death Benefit Rider, Waiver of Premium Rider, Income Benefit Rider, Special Exit Value Rider, Premium Break Rider, Guaranteed Insurance Option Rider and Critical Illness Benefit Rider.

Accidental Death Benefit Rider: Accidental death benefit riders promise an additional sum assured in case of accidental death of the policyholders. Suppose a base policy offers a sum insured ₹50 lakhs, and the policyholder has availed the Accidental Death Benefit Rider ₹10 lakhs. On the death of the policyholder, the insurer pays ₹60 lakhs to the beneficiary nominee.

This rider is essential in today’s life, as almost everyone needs to travel for their job, business or other work. “Perhaps, you should be careful while driving. However, you cannot be sure of other people driving on the road; hence, this rider is essential for people traveling outside the city or abroad,” says Naval Goyal , Founder and CEO, PolicyX.com said.

Premium Rider Waiver: Generally, a policy terminates automatically when the insured stops paying premiums due to job loss or disability. However, this rider helps the policyholder to keep the policy active even if the premium is not paid in such cases. It entitles the insured to their policy and provides access to all its promised benefits.

According to industry experts, this rider helps people working in vulnerable environments and who require frequent hospitalizations affecting their income.

Income Benefit Rider: This rider provides annual additional income to the policyholder’s family in addition to the sum assured. “Earners with large and extended families can go for this option as sometimes only the sum insured is insufficient for the survival of the family which may include aged parents, children and spouse who may not have any income. Source is not. Goyal said, it helps in maintaining the family of the policyholder.

Critical Illness Benefit Rider: This rider pays a lump sum on valid diagnosis of a critical illness covered in the plan which can be useful to the policyholders or their family in difficult times.

Any person who has a family history of serious illness or lifestyle that is likely to happen in future can take this rider. Piyush Trivedi, Joint President, Kotak Life Insurance, said, “Given the incidence rate of critical illness and the impact of lifestyle-related illness, this benefit is relevant for all individuals, irrespective of age. If we still need to identify a segment, then anyone who is 30 years of age and above should have this cover.”

Return of Premium Rider: This rider helps the policyholder to get a refund of the total premium paid for term insurance, if he survives the term of the policy. But if the policyholder dies during the policy term, the Sum Assured is paid to the nominee.

Most people feel that term insurance is useless if they survive the term of the policy. Thus, people who are looking for some return on their survival can buy this rider. An industry expert said that a conservative investor looking for financial safety and security can buy this rider.

Accident Disability Benefit Rider: This rider comes into play if the policyholder faces permanent or partial disability due to an accident. The policyholder can get regular salary in a specified percentage of the Sum Assured for the next 5-10 years after the accident. This fixed income can serve as regular income for the policyholder. Those involved in traveling, driving or biking can opt for this to ensure that no accidental incident causes their families to suffer. “Again, this rider can be availed by all riders between the age group of 18 to 50 years,” Trivedi said.

Special Exit Value Rider: This rider gives the policyholder the freedom to choose the time of exit from the policy and receive all the premiums paid for the basic cover benefit. This rider can be availed when the policyholder does not claim the return of premium.

According to Goyal, those who think that their financial responsibilities towards their family will be over by the age of retirement and their family will no longer be dependent on them for finances can use this rider. “This rider is for the public because it comes free,” he said.

Premium Brake Rider: This rider allows you to get freedom from premium payment by taking two breaks during the course of the policy and still the policy remains active. It helps policyholders pay premiums for one year, during which their policy will still cover them. The first break can be taken only after 10 policy years, if the policy is in force. The policyholder can use the second premium break only after a minimum of 10 years of the first premium break.

According to industry experts, this premium can help policy buyers in the age group of 30-35 years who want to take a break from paying insurance premium in future to meet their other responsibilities like education fee or surgery for children.