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The purpose of life insurance is to protect
our loved ones from financial disaster if something untoward happens to
the
breadwinner. The benefit could serve to pay off a loan or for a child’s
education or to provide or supplement the family’s income. However, one
policy
does not cover everyone’s needs at all stages of life. The riders to
insurance
policies address such needs. To give you the flexibility to customise
and
enhance your cover, insurance companies offer a set of riders, which
you may
opt for along with your basic policy, and shape your policy to suit
your
individual needs.
Riders benefit you
Riders are additional benefits that can be
attached to your basic life
insurance policy. These riders give you the benefit of increasing your
risk
cover for certain events. They give you the benefit of customising the
policy
to suit your situation without putting a heavy bruden of premiums. For
instance, you could take a critical illness rider and rest easy that a
major
part of your medical expenses will be covered in case of illness.
Riders should
be chosen according to your needs. Indiscriminate subscription to
riders will
only increase your premiums without giving you the benefits you may
actually
need.
The Cost Element
Although you need to pay an additional charge
towards coverage for the
rider, these are normally lower than individual policies that provide
the same
benefits. If the event that has been insured against through a rider
occurs, the person
insured or his
beneficiaries will be paid the rider benefits. Typically, insurers let
you
attach a rider at the time of taking the policy. Some also offer you
the option
to attach a rider at a later date, though the cost may be higher,
depending on
your age and health. The maximum amount of benefit you can avail of is
equal to
the basic sum assured. The biggest advantage of riders is that the
premium
remains fixed for the entire tenure of the policy. Here are some common
riders
that you might like to consider:
1. Accident and Disability
Benefit: This provides for additional cover on the
base policy, in the event of accidental death or disability which might
be
permanent or temporary, total or partial following an accident.
2. Waiver of Premium:
This rider is activated when the insured is completely disabled or
loses his
source of income because of unemployment owing to an injury or
sickness.
Thereby, the premiums due on the base policy and other riders, if any,
are
waived till the person becomes able-bodied and is employed again.
3. Term cover:
This rider offers enhanced life cover for the fixed period chosen. For
instance, if you have the burden of a loan, the rider can be taken for
the
period of the loan.
4. Critical Illness:
This rider provides for cover against listed illnesses, including
cancer, heart
bypass surgery, heart attack, kidney failure, stroke and major organ
transplant, among others. The main difference between a critical
illness
benefit and a mediclaim policy is that, under the critical illness
benefit, the
policy holder gets an amount equal to the sum assured irrespective of
the
medical expenses, on diagnosis of the critical illness. Under a
mediclaim
policy, the policy holder receives reimbursement on producing the
bills. The
reimbursement is limited to the amount of medical expenses incurred.
Disclaimer: The
information provided here is only for informative purposes and nothing
more. It is not in any way to be construed as authoritative. Always
consult your financial advisor before taking any decision. It is
informed to the people that this information that is provided here is
not to be acted upon. In spite of our advise, if any person acts upon
the contents of this web site and incurs a loss, they do it on their
own risk. We are not to be held responsible for any loss, incorrect
information etc.
Other Pages on Insurance: Life Insurance Riders Insurance under the Married Women's Property Act, 1874
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