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.
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