Life Insurance Riders: Are they beneficial?

You can choose to add some extra benefits to your basic life insurance cover in your insurance policy, by paying additional premium.

These additional benefits are called insurance riders.

Generally, the extra premium for the riders is relatively low, since the extra premium goes towards covering the risk mentioned in the rider and not to savings.

The riders do not change the basic life insurance plan and the nominees of the insured will get that additional Sum Assured in the event of an unfortunate death of the Life Assured.

Are life insurance riders beneficial for you?

It depends on your personal situation as well as your other insurance policies.

Let’s read on…

Types of riders we will cover…Permanent &

Partial Disability

Rider

Waiver or Premium Rider

Critical Illness Rider

Accidental Death Rider

Guaranteed Insurability

Rider

Permanent & Partial Disability Rider

With this rider, you will get a certain percentage of the sum assured on a regular basis, if you become permanently or temporarily disabled due to an accident and can’twork.

Waiver of Premium Rider

With this rider, you don’t need to pay the premium if you become totally disabled due to injury or illness and can't work.

This rider can be particularly beneficial when the premium amount is quite high and helps prevent the policy from lapsing if you are unable to pay the premium due to a disability.

Critical Illness RiderThis rider protects you in the event of a critical illness.

This rider pays out a lumpsum amount if the insured is diagnosed with any one of the illness specified in the policy.

Generally, the extra cover is equal to the sum assured on the base policy and is paid upon diagnosis of the illness.

Accidental Death Rider

With this rider the insured gets an extra amount, in addition to the sum assured, if an accident results in the death of the insured. This is applicable ONLY if the cause of death is an accident.

However, if the sum assured in the basic policy is adequate for the needs of the family of the insured, then the insured need not buy this rider.

GuaranteedInsurability Rider

This rider allows the insured to buy additional life insurance coverage at a later date without the need for further medical examination or without providing any evidence about insurability.

The usefulness of these Riders will depend on your personal situation as well as your other insurance policies, such as an Accidental Insurance Policy, Health Policy, Critical Illness Policy, etc.

Remember, riders come at a cost. So ask yourself or consult a financial adviser if you really need the rider.

Do you reallyneed a Rider ??

Tax Benefits of Riders

Riders (other than Critical Illness & Waiver of Premium riders), get tax benefits under Section 80C of the Income Tax Act on premium contribution of up to Rs 1.50 lac per year

Additionally, the premium paid for the Critical Illness Rider and the Waiver Of Premium Rider qualifies for deduction from the taxable income under Section 80D of the Income Tax Act up to the limit of Rs 15,000 (Rs 20,000 for Senior Citizens).

Now that you know the useful Riders available, you may consider adding these to your new life insurance policy.

Riders like Permanent or Partial disability and Accidental Death are useful at almost any age.

Whereas Critical Illness, Waiver of Premium and Guaranteed Insurability riders are more useful as the insured approaches the middle age.

Happy Investing!

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