The core purpose of a life insurance plan is to offer financial support to the family in the unfortunate demise of the insured. Most life insurance policies cover death by accident or natural causes. However, the devil lies in the details. It may not cover death due to terrorists attack or loss of limbs.
Therefore, the scope of an insurance policy is sometimes not sufficient to ensure your family’s financial security. However, you can fortify your insurance plan by buying an additional cover for extraordinary circumstances. These add-ons are called riders. Here are a few important insurance riders.
1) Accidental Death and Disability Rider
Death by accident is typically covered by a life insurance policy. However, when you purchase an accidental death rider, you are ensuring that the nominee is paid an additional sum apart from the sum assured in the event of death or permanent disability due to an accident.
In case of permanent disability due to the accident, benefits such as waiver of future premiums are also offered. The types of disabilities covered along with the benefits offered may differ from insurer to insurer.
2) Critical Illness Rider
Under this rider, you pay an extra amount to protect yourself in the event of being diagnosed with any of the critical illnesses covered by the policy. The illnesses covered under the rider may vary from insurer to insurer, but cancer, first heart attack, stroke, and open chest CABG are typically covered.
Read our article on why Critical illness rider is a must have rider for Indians.
3) Waiver of premium
Waiver of premium, as the name suggests, keeps your policy functioning even after you are unable to pay future premiums due to loss of income because of disability or some critical illness as defined in the policy. This rider ensures that the tenure and benefits of your policy remain unaffected while waving off future premiums.
4) Term Rider
Akin to a term insurance plan, a term rider pays the rider sum assured to the nominee in the event of the insured’s death before the expiration of the policy. Some insurers offer customized term riders where payout can be equal to the sum assured or a pre-determined value defined in the life insurance policy.
"The question isn’t who is going to let me; it’s who is going to stop me"- Ayn Rand -
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