- Riders are like add-ons that give additional benefits above your existing life insurance policy
- These riders can be broadly slotted into five heads - accident, health, insurability, waiver of premium and term plans.
- Riders allow you to customise your policy to match your needs.
There was a time when you walked into a coffee shop, ordered a coffee, drank it, paid the bill and walked out. You didn’t spend too much time thinking which coffee to order because there was only two to choose from – espresso and filter coffee. If you were lucky there was also a cold coffee that was available for those looking for one. Not any more though.
The entry of coffee chains has increased the competition and a bewildering choice of coffee variants available. Not only do you get a standard and large drink you get to choose many options - from the coffee seeds to the brew to milk and sugar variants, making the choice tough. For the consumer, there is plenty to choose from to suit their mood, palate and willingness to pay.
Something similar is happening in life insurance. The customisation of insurance covers has resulted in insurers offering solutions to prospective policyholders to choose from by way of adding insurance riders to policies.
Insurance riders represent a major milestone in this customisation. These are the add-ons that one can take along with one’s life insurance policy to either enlarge the cover or enhance the scope of the cover. Riders allow you to customise your policy to match your needs. Just as extra toppings enhance the taste and value of the pizza, a rider enhances an insurance policy.
For instance, by paying a little extra premium, one can add an accidental death benefit rider. A little more gives one cover for medical expenses in case of a surgery or critical disease. There’s even a rider that allows the insured to enlarge the insurance cover later without having to go through medical tests. In some ways, riders allow you to cover risks based on your unique needs.
But you wouldn’t want too many toppings on your pizza or too many variants of coffee, just because they are available, would you? After all, you are looking for something that you would like to consume. Similarly, one must be selective when it comes to riders. Assess your insurance needs properly before taking a rider.
Say, you are in a profession like sales and travelling out is a usual occurrence. In such a situation, an accident death cover will be valuable. Likewise, if you have a family history of diseases and ailments, opt for a critical illness cover. A critical illness rider is truly beneficial because it provides the insured person with money immediately after the diagnosis. That way, the person has a chance to use the money for the treatment.
Then there is the waiver of premium as an option, which is useful in cases where you would not want to burden your financial dependents to pay future premiums. This rider will take care of this risk. There is also additional term rider available, which you could include to increase the scope of your life insurance policy.
The biggest advantage of riders is that the premium remains fixed for the entire tenure of the policy. Choose the right rider to enhance your life insurance cover - qualitatively as well as quantitatively. And make sure you opt for one when you take a policy than miss out the opportunity because you cannot add a rider to an existing life policy.
