Here is Why You Should Add a Rider to Life Insurance Policy

The basic fundamental of a life insurance policy is to offer financial security to your loved ones when you’re around. But there are times when the coverage and the benefits provided in the policy wouldn’t fill your requirements. In such circumstances, you can fill that gap and customise the policy as per your needs by adding a rider to life insurance policy.

Rider or add-on is the added benefit that broadens the scope of your life insurance coverage. As a policyholder, you can enhance the advantages of the policy by selecting add-ons such as personal accident, critical illness, and a few others. Note that these riders come with an extra premium charge.

• Extra coverage: This is the basic advantage of adding a rider to life insurance policy. You are entitled to extra coverage, which means getting paid extra amount in case you are diagnosed with a critical illness or meet with an accident.
• Affordability: Instead of buying a separate policy to avail a benefit or coverage, it is best to add it to your existing life insurance coverage to ensure affordability.
• Flexibility: Whether you have a unit linked insurance plan (ULIP), whole life insurance or an endowment policy, it is easy to customise the life insurance policy variants as per your requirements.
• Tax benefits: The premiums you pay to avail the rider/ riders are also covered under tax benefit provisions as under section 80C of the Income Tax Act.

• Waiver of premium: If a policyholder dies or suffers a partial or permanent disability and has opted for waiver of premium rider, the policyholder or surviving family members do not have to pay future premiums. The insurance company pays on policyholder’s behalf.
• Critical illness: If you are selecting critical illness rider, you are entitled to get compensation or sum assured in a lump sum if you’re detected with any of the life-threatening diseases such as cancer, brain tumour, nervous system, etc.
• Accidental death rider: A life insurance company intends to provide compensation in case of death of the policyholder. However, if the cause of death is an accident, then the sum assured to the beneficiary is doubled.
• Permanent & partial disability: This type of rider ensures that you’re paid in a lump sum or for a specific period which can be five years, ten years or even more if the permanent & partial disability is caused due to accident.
• Income benefit rider: As a policyholder, if you have a sudden demise or incapable of generating income, the income benefit rider ensures that there is no interruption in the routine source of income.

It is imperative that you assess your lifestyle and add a rider/riders to the life insurance policy. Before making a final decision, check for competitive rates and claim settlement ratio.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.