A life insurance policy offers to provide coverage for your life in exchange for premiums. A definite amount is known as ‘sum assured’ is provided to your family if you die during the policy term.
You can increase this sum assured amount of your policy further by the use of ‘Riders’.
What are Riders in Life Insurance Plan?
Life insurance riders or just riders are the improvements or modifications that can increase the sum assured of your life insurance policy. Thus, through riders, you can get yourself additional coverage over and above the sum assured. These are additional benefits that can enhance the scope of your existing policy.
Why should your Life Insurance Policy have Riders?
Riders or added benefits offer many advantages for you under the single base policy. The most prominent reasons why you should include riders in your life insurance policy are as follows:
1. Increase the Coverage
Riders can help you cover those events and happenings that your base policy does not. By broadening its existing scope you now get more from your life insurance policy.
Riders are available as add-ons to your policy, that is, these get included in the policy you have already purchased. Thus, life insurance riders ensure that you do not have to purchase another life insurance policy.
This makes your policy economical. Yes, the premiums increase, with riders, but the cost that you have to pay to add the rider is much lower than the cost you would pay as premiums for another life insurance policy.
3. Provide Flexibilities
Insurance companies offer many riders for policyholders. You are given full freedom to choose the riders. You can add or remove a rider at any time of the policy. This helps you to customize your plan according to your own need. The insurance company also offers you the flexibility to choose your sum assured associated with a rider.
4. Tax Benefits
Like your life insurance policy, the riders you choose to add on are also eligible for tax savings. They are also available for deduction u/s 80C. The sum assured that you receive from a rider is also tax-exempt u/s 10(10)D of the Income Tax Act.
Also Learn what is Income Tax Return
Types of Riders Available in a Life Insurance Plan
Now that we know what are riders in insurance and how can they help improve your existing life insurance policy, let us move a step forward and take a look at the special riders provided by life insurance companies.
Here are the riders that are offered:
- Critical Illness rider
- Accidental Death benefit
- Accidental and total permanent disability
- Child support benefit
- Premium Waiver Rider
1. Critical Illness Rider
This rider pays you a pre-determined sum if you get diagnosed with a critical illness. Any disease or a condition that can have fatal consequences and requires immediate and major treatment can be counted as a critical disease
What are Critical Diseases?
Diseases such as cancer, stroke, heart disease, organ transplant, and others listed by the company can all be characterized as critical or terminal diseases. These diseases require constant medical care and involve huge costs.
If you have opted for a critical illness rider and get diagnosed with any of the diseases listed in the policy, you will get immediate payment.
2. Accidental Death Benefit Rider
By choosing this rider, your family will receive an additional sum assured if your death is due to an accident.
Accidental deaths can lead to additional costs for your family after your demise. Opting for the accidental death benefit rider can thus help provide your family enhanced financial protection by way of additional sum assured.
For example, you have purchased a term plan of Rs 1 Cr. With this, you have also opted for the ADB rider worth 25 lakhs.
If you die in an accident, then your family will receive a total of Rs 1.25 Cr.
3. Accidental and Total Permanent Disability
This is also an additional benefit that comes into action if you get a disability due to an accident. Disability not only takes a toll on you physically and mentally but financially as well. This can stop you from working and in turn, can stop your earnings.
Depending on the provider, ATPD riders can provide you with regular income or can waive off premiums.
4. Premium Waiver Rider
The premium waiver rider ensures that your family does not have to worry about how they will fund the remaining premiums after your death.
If you have opted for this rider, then the company will take care of the premiums that remain if you die during the policy term. Premiums to be paid are waived off. The policy will continue to run even after your death.
Riders in Canara HSBC Life Insurance Policies
The wide range of policies by Canara HSBC Life Insurance offers you a variety of riders. You can enhance your policy further with these optional benefits. With these policies, you have the following advantages.
a. Terminal Illness Rider Pre-Included in iSelect Smart360 Term Plan
In most of the policies, you need to purchase a critical illness rider as an add-on to your policy. But in policies such as Canara HSBC Life Insurance’s iSelect Smart360 Term Plan, the critical illness rider is pre-included. Thus, you do not need to pay anything extra to avail this rider.
Under this plan, if you get diagnosed with a terminal illness such as cancer, lung disease, heart attack, etc, then you will get an additional sum assured immediately. To check the diseases that are covered, please refer to the policy’s webpage.
b. Premium Waiver on Disability and Accidental Death Benefit
Permanent disabilities like loss of two limbs, capacity to see or hear, can affect your earning capacity. Such events often also need your family and infrastructure to adjust to your new requirements. But disability is not the end of life, and so, your life cover must continue to protect your family.
Premium waiver benefit is available with accidental total and permanent disability (ATPD) benefit rider in the iSelect Smart360 Term Plan. You can also add a sum assured to this rider along with a premium protection option.
c. Premium Funding Benefit in Guaranteed Savings Plan and ULIP
Guaranteed Savings Plan and ULIPs such as Invest 4G come with the premium funding benefit. This makes sure that your premiums are taken care of even after you are gone and your family can achieve their goals.
Here in this option, in case you die, the company will itself pay the premiums that remain to be paid. That is, your family does not have to take the trouble of paying the premiums.
For example, suppose your premium payment term (PPT) is of 10 years in which you pay the premium annually. Now if you die after 8 years of taking the policy, then the remaining premiums will be waived off. The company will pay the premium for the last 2 years, as and when due.
While you may have a lot of options as riders with your life and health insurance plans, you should stick to the ones adding protection value to the policy. Riders enhance your life or health policy’s value against additional life risks at a nominal cost.
Also Read about Life Insurance QuotesDisclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised to exercise their caution and not to rely on the contents of the article as conclusive in nature. Readers should research further or consult an expert in this regard.