An Insurance expert (IA) overheard two young men, A & B, in a café. The conversation is as pictured below.
A - What are Riders in Insurance?
IA - ‘Riders’ in a financial context actually means an optional insurance linked benefit, purchased separately at an additional premium. Riders help the insured customize the policy to fit his or her specific needs.
B- What are the different types of riders?
IA - There are several types of riders and they differ from company to company and policy to policy.Here is an indicativelist of riders:
B - Can I add or discontinue a rider any time within the policy tenure?
IA - Generally, riders have to be selected at the time of buying the policy. However, certain insurers do allow addition of riders at a later date. Opting out of the rider depends on the terms and conditions of the rider.
A - Is there any limit on the coverage amount, premium and number of riders I can opt for?
IA - Generally, there is no limit but the premium of health related rider cannot be more than 100% of premium amount of basic policy. In addition, all other riders put together shall be subject to a ceiling of 30% of the premium of the basic policy. The benefits arising from each of the riders should not exceed the sum assured under the basic policy.
One can select a rider based on the perceived risks and needs from the insurance policy. The benefits offered may be different from each insurer and may vary from rider to rider.
"Knowing yourself is the beginning of all wisdom"- Aristotle -
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