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9 Types of Life Insurance Riders in India

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Types of Life Insurance Riders in India

While life insurance provides risk coverage to the life insured, riders on life insurance provide additional coverage beyond the base coverage.  Riders in life insurance plans come with additional premiums, however, provide several additional benefits. One can choose a rider in life insurance while buying a life insurance plan or during the renewal.  What is Life Insurance Policy Rider all about? What are various Types of Life Insurance Policy Riders available in India?

What is a Rider in Life Insurance Policy?

Life insurance policies come with various features. However, most of the life insurance policies are simple plans. Beyond this, they offer riders which are add-ons or have additional benefits which can be opted at affordable premiums. This increases the coverage of the base policy.  There are various riders like accidental death benefit rider, permanent disability rider, surgery care rider etc.,

What are various benefits of Life Insurance Riders?

Here are some of the key benefits of riders on life insurance.

1) Enhanced Coverage: Having a rider provides an extra coverage to the life insurance plan. E.g. critical illness rider provides lump sum amount in case of diagnosis of critical illness and such lump sum can be used to pay off outstanding loans, to meet day to day expenses, meet medical expenses (if any) etc.

2) Premium Waiver: There could be cases where a policy holder would have diagnosed with a critical illness or would have disabled due to accident and is not in a position to pay premium for the life insurance. Premium waiver benefit would provide relief in such case, while continuing to have life insurance coverage.

3) Low Additional Premium: Since riders are offered along with life insurance, such riders come with low premiums.  One can easily afford additional benefits with minimal costs. You can opt Low premium Term Insurance Plan with Riders.

4) Flexibility to add to any plan: You might have a simple term plan or ULIP or an insurance cum savings plan etc. You have the flexibility to add riders to any of such life insurance plans.

5) Income Tax Benefits: Riders on Life Insurance are considered to be addition to the life insurance plan, hence the premium paid for riders is eligible for income tax rebate u/s 80C.

9 Types of Life Insurance Riders in India

Here are major riders in life insurance plans offered in India.

1) Accident Death Benefit Rider

Under this rider, in case of accident of the life insured, sum assured would be paid to the nominee. Majority of the cases, death might not happen on spot on accident. It might happen even after 3 to 6 months from accident. In all these cases, accident death benefit rider would be paid and it provides enhanced protection beyond life insurance coverage.

2) Accidental Total and Permanent Disability Rider

This rider benefit is paid in case life insured suffers total permanent disability due to accident which disables life insured from earning and pay further life insurance premiums. Majority of the cases, this rider is offered along with accident death benefit rider.

3) Critical Illness Rider

This rider has major critical illness coverages like heart diseases, cancer, tumors, organ failures etc. This is the most preferred rider in life insurance. In this rider, life insurance company would provide critical illness rider benefit in case of diagnosis of any of the critical illness riders listed in the policy during the policy term.

4) Rider on Premium Waiver

This rider is generally opted along with critical illness rider or total permanent disability rider. In case life insured is diagnosed with a critical illness or met with an accident and suffers from a total permanent disability, all future premiums would be waived off and life insurance coverage would still continue till the end of the tenure.

5) Accelerated death benefit rider

In this rider, in case life insured is diagnosed with any critical illness, accelerated death benefit would be paid which would be part of the sum assured. Such amount can be used for medical treatment of the life insured.  Remaining amount would be paid to the nominee / family members.

6) Term Plan Rider

Under this life insurance rider, in case of unfortunate death of the life insured, the nominee would get the benefit amount as per rider either in lump sum or monthly income. Generally, the term plan rider benefit would be equal to base plan coverage of the life insurance. E.g. If the base plan sum assured is Rs 50 Lacs, term plan rider is also Rs 50 Lacs. These riders are offered in some of the Best Term Insurance Plans in India.

7) Hospital Cash Rider

Under this plan, if the life insured is hospitalized for treatment, a fixed amount is paid towards hospital cash benefit rider depending on the daily expenses of the hospitalization.

8) Income Benefit Rider

In this life insurance rider, in case of unfortunate death of the life insured, a pre-defined number of monthly installments which is equal to the monthly income of the life insured would be paid to the nominee. This would help family members to continue to have healthy lifestyle even in the absence of life insured.

9) Surgical Care Rider

Under this rider, if the life insured has undergone an unavoidable surgery in India, an amount equivalent to surgical care rider benefit would be paid to the life insured.

Suresh KP

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