RIDERS provide additional value to your life insurance plan, enabling you to customise your insurance cover according to your requirements for an additional premium, which is relatively low compared with the base plan. Riders are not standalone products, but an additional benefit option that can be purchased along with the base insurance plan (be it protection, savings or pension on either traditional or unit-linked platform).
Some of the popular riders include critical illness cover, accidental death benefit, total and permanent disability cover, waiver of premium and additional term benefit. A critical illness (CI) rider attached to a protection or savings plan ensures that an amount equal to the sum assured selected under this rider benefit is paid on diagnosis and survival (after contracting a critical illness). Your base policy con illness). Your base policy continues and is unaffected in any manner.
This rider can be opted for as an additional or accelerated benefit. In case the rider is taken as an accelerated benefit, the benefit under the base plan is accelerated and paid on the diagnosis of the critical illness and the base policy too terminates. In case of an additional benefit, the amount of sum assured under the rider is paid on diagnosis while the base plan still continues to be in force.
Critical illness benefit can also be in-built in plans.
In an accidental death benefit (ADB) rider, an additional amount equal to the rider sum assured selected under this plan is paid to the policy holder on death due to an accident.
This amount is paid in addition to the sum assured under the base plan. The policy contract terminates on the payment of the p benefits. For example, a 30-year-old male opting for a Rs 10,00,000 sum assured for p a 20 year term (traditional plan) can avail u ADB benefit of Rs 4,00,000 by paying just p about Rs 600 extra. Also, ADB riders are n in-built in certain products, especially Ulips. Individuals need to opt for this option while selecting the plan. u If you are frequent traveler or spend a lot of time working with heavy machinery, ( or have a family history of critical illness, the above riders will fit best and can ensure financial support to your family.
Other riders such as total and permanent disability cover, waiver of premium or the plan for additional term benefit can provide additional financial support to the family in the event of a disability that severely affects the earning capacity of the breadwinner.
In a waiver of premium rider, if the life assured develops disability leading to inability to pursue any occupation, the base policy premiums are waived off till death or maturity of the policy, whichever happens earlier.
In a total permanent disability rider, if the life assured in case of an unfortunate event (accident or sickness as covered under the rider) faces total and permanent disability, a potion of the sum assured, say 10 per cent, is paid every year for a specific period defined in the policy. Total permanent and partial disability benefit riders are also offered under group term insurance plans.
An additional term benefit rider provides an additional sum assured in the death of the life assured during the term of the rider. This is paid in addition to main benefit.
This is mostly attached to conventional endowment and moneyback plans.
To make the best use of a rider, it is important to under stand different kinds of riders and their benefits and how they will fit into your risk ap petite. A need-based analysis by a good financial planner will be useful in this regard.
Here are a few questions that you need to ask while pur chasing a rider plan: e the benefits of the rider and What are the benefits of the rider and what risks are specifically excluded? Will my policy continue after rider benefits are paid?
What is the additional premium to be paid? How long do I have to pay the premium? What is the frequency and mode of payment allowed? What happens if I do not pay the premium in time?
What is the claim process for a rider? To whom will the money be paid and the document required for making a claims?
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