At this stage of life, it is not news to you that there are always uncertainties. You can barely tell what you will experience the next day. And it is even harder to know whether that experience will be a good or a bad one. However, if you have a family, whatever experiences you have affect them as well. This is especially true in the case of death or disability. Your death or disability can heavily affect your family. While it is an immense emotional burden, it can also be a financial one if you are the bread winner of the family. In such a situation, life insurance plans are a must.
Life works in such a funny way that sometimes even having life insurance is not enough. For all that is offer, it can always offer more. To make sure you can have all the coverage you need, life insurance providers offer riders. Here is a look into what they are and how they can help.
What is a life insurance rider?
Riders are additional coverages that the insurance provider offers. The policy you buy is a base level of coverage. It basically offers a payout to your family in the case of your death. However, to fulfill any special needs that they may have, you can use a rider. These life insurance rider plans are extra coverage for specific conditions in exchange for an extra premium. If you feel you will face those conditions in the future, then it is better to buy these riders. Since they can bump up your premium, it is important to choose the right one. Here are a few life insurance riders you should look for:
- Accidental death benefit rider
If the policyholder insured dies because of an accident during the term, the rider pays an additional amount apart from the sum assured of the policy. This added amount is calculated based on the sum assured. In certain cases, buying this rider could mean that you would have to face a maximum limit on how much sum assured you can opt for. However, other terms and conditions of the policy remain the same for the whole policy term. This rider is suitable for people who work in dangerous situations and who travel frequently for business. It provides larger coverage at an affordable cost.
- Critical illness rider
There is a set of ailments that classify as critical illnesses in the field of insurance. Essentially, these illnesses are extremely dangerous and have higher chance of leading to disability or death. Moreover, these diseases often are very expensive to treat. As per the critical illness rider, the policyholder gets a lump sum amount once the disease is successfully diagnosed. This lumpsum can be used to treat your disease the best way it can be. Depending on your insurance provider, a long list of major illnesses are covered under this rider.
Following the diagnosis of a critical illness, there may be a change in your base policy as well. This can differ from policy to policy and from insurer to insurance, but your policy either could continue or be terminated after you have received this payout. Ideally, this payout does not affect your base policy. However, you need to check with your insurance provider.
Waiver of premium rider
This rider will waive off the future premiums of the policy if the policyholder can no longer pay them due to disability or income loss. Let’s be honest, insurance is not the only important expense in life. You can sometimes get stuck in a financial ditch managing different needs. Now, you are always needed to pay a premium for insurance. To know the premium to be paid for a life insurance, you can always use a life insurance premium calculator available online. But, in an urgent situation like disability or income loss, losing life coverage can be devastating. Hence, the best way to ensure that does not happen is to buy a waiver of premium rider.
Life insurance riders are like a double-edged sword. They are as effective as the one that wields them. Hence, if you decide to have life insurance riders, make sure you have the right ones and spend the right amount on them.
