Life insurance is a financial backup for individuals when life takes unexpected turns. It benefits your family members in case of an untimely demise due to an accident or other reasons.
A basic life insurance plan, as opposed to general insurance, will support the financial security of your closed ones in your absence. Even so, you can enhance the protection by adding extra benefits, also called riders, in the policy. These are a great choice to ensure comprehensive coverage against various unforeseen circumstances.
Let’s take an extensive look into rider meaning in insurance along with the type of riders in insurance and major benefits.
A rider in insurance is defined as an additional layer of protection that you might add to your existing insurance product. Simply put, it is an add-on or provision to the terms of a life insurance policy that provides additional coverage or enhanced risk protection.
A rider is handy when a specific insurance plan does not cover your financial planning requirements. It allows you to tailor that plan to meet your precise financial needs.
Riders come with an extra cost - on top of the premiums a policyholder pays.
Buying an insurance rider depends on the insured, who should certainly weigh the cost against their needs at individual levels.
In most cases, a policyholder can add a rider when purchasing life insurance. However, once the plan has been initiated, you’re not allowed to pick a rider by most insurance companies.
Some of the most common types of riders in insurance are listed below.
This rider is available only when the policy starts and may have certain restrictions, such as age limits and health requirements.
Under the waiver of premium, if a person is unable to make payments for a premium because of accidental disability, serious injury, or loss of income, the future payments will be waived by the insurer. Your inability to pay the premium will not cause a loss of policy benefits.
Note that if you have this rider in insurance and cannot pay a premium on time, all the benefits the policy offers will be lost.
An accelerated death benefit rider is a provision in your life insurance policy that allows you to receive a portion of the assured sum if you become terminally ill. The amount you receive is deducted from your death benefit and is typically limited to a percentage of the plan’s amount. This limit might differ from one insurer to other.
This rider ensures that you can take care of your treatment and other care without compromising your family's financial security.
An accidental death benefit rider is an essential type of insurance rider that provides financial aid to the family of the policyholder in case of their untimely demise because of an accident. It covers fatal accidents, homicides, aeroplane crashes, wrongful death, falls, and fire-related injuries.
You have to pay either a regular, limited or single rider premium to obtain coverage under this rider. The major benefit of the rider is that it offers your family access to a large sum.
An accidental disability rider is an add-on that can be included in your term life insurance policy. It allows the policyholder to receive a percentage of the sum assured if they are disabled permanently or partially after an accident.
People who travel often and work with hazardous materials or locations must include this rider benefit. Others can also choose, as unexpected events can occur at any point.
When you add on a critical illness rider, the policy pays a lump sum if you are diagnosed with any diseases or illnesses covered under the plan. These include renal failure, cancer, organ transplant, stroke, coronary artery bypass, paralysis, and more.
Once the diagnosis is complete, the insurance may continue or end depending upon the terms and conditions.
The income rider ensures that in case of the untimely demise of the family’s sole earning member, their beneficiaries receive a specific fixed income every year for a pre-specified period.
A long-term care rider is available as a rider benefits from cash-value insurance policies such as universal, variable, or whole life insurance. Under this, the person can address long-term care issues.
It provides financial protection when you become too ill to take care of yourself and have to pay others, such as nursing homes, private nurses, or other medical facilities.
The payout from an LTC rider is taken from your policy’s death benefit. As such, the beneficiaries of your insurance will receive less benefit than the sum paid out under the long-term care rider.
The term conversion rider allows you to convert a term life insurance plan to a whole policy for a specific period without going through a medical exam or underwriting.
When you convert the policy, you can keep the health rating it featured when it was first issued. Though you will have to pay more coverage for the policy period, it will likely be less economical than purchasing a separate plan.
Some insurance companies provide the benefit of converting whole life or universal policy, while others might only give you one choice.
Exclusionary riders restrict coverage under health insurance policies for a specific condition, body part, or body system. However, the law forbids exclusionary riders from being applied to children.
This benefit is available over and above the basic insurance plan’s standard benefits.
Financial security in the event of unexpected and unforeseen events is why most people opt for insurance policies. Riders in insurance help to add more benefits to your basic term life insurance. These are usually tailored to meet your needs and provide extensive insurance coverage.
But that’s not all. There is more to the rider benefit, including:
Individuals opt for the insurance rider because of the improved and added protection they offer their family. It ensures they are safeguarded from multiple risks in your absence.
With costly treatment plans, life-threatening diseases and accidental impairments can also be financially straining, if not more. Adding riders to your policy, as such, will give more weight to your plan and ensure better protection for your family.
Adding riders to the basic life insurance plan further enhances the overall insurance coverage of your policy. In certain situations, such as accidental fatalities and hospitalization – high medical costs might be incurred before the unfortunate demise. As such, your family will need more funds than the death rider to take care of these expenses.
In some cases, the rider amount can also be used to address loan EMIs, household expenses, and other financial liabilities.
Some policyholders might have specific needs that a standard life insurance plan can’t cover, so riders can help to create insurance policies that fulfil those needs. Most insurance companies provide different types of riders to customize plans by adding various types of additional coverage. One can choose a rider or a combination of riders that suit their needs.
Another rider benefit is that they are incredibly affordable to purchase by an individual. You don’t have to pay for a new insurance plan to enjoy some specific perks. Instead, you can pay for those features only with your basic insurance policy.
Since riders are add-ons to the life insurance plans, payment towards these insurance riders also provides policy holder with tax-saving benefits as per the Income Tax Act, 1961 under section 80C or 80D, whichever is applicable. Moreover, health riders such as Critical Illness (CI) Riders and Waiver Premium Benefits on Critical Illness in your policy can also provide tax benefits.
When purchasing an insurance plan, you must go carefully through the policy details not only to make the most out of your plan but to select the rider. Make sure to go through the policy document to ensure that the rider does not duplicate the cover terms of your plan.
It is also recommended that you research possible riders and weigh the cost of the add-ons to check if they are required.
At PNB MetLife, we feature the better insurance plans and riders that meet your varied financial requirements to help you secure you and your close ones' future against an unknown tomorrow.
If you’re thinking about attaching a rider to the main insurance policy, you will have to pay a certain amount alongside the basic premium amount. However, to buy riders is more reasonable than purchasing a new insurance policy.
To put it simply, a rider is a cost-effective add-on that you can choose to attach to increase the benefits of life insurance policy plan. It provides comprehensive coverage and add benefits against risks.
Most insurance companies will allow you to simply drop a rider from the insurance plan by filling out a form or you may also do so online, provided the facility is available with the insurer.
Riders are sold individually from the insurance policies and are attached to the base plan. But when you look for an insurance plan, the insurance companies will provide you with a list of riders.
Although the age limit for term insurance differs from one plan to another, normally, a person has to be between 18 to 65 years of age to opt for an insurance rider.
PNB MetLife provides the given riders with insurance – Accidental Death Benefit Rider Plus, Serious Illness Rider, Accidental Disability Benefit Rider, Critical Illness Rider, Group Accidental Permanent & Total Disability Plus, Group Accidental Permanent & Partial Disability Plus, Group Illness Serious Rider, and Group Accidental Death Benefit Rider Plus.
Riders often do not provide coverage for situations related to self-inflicted injury, suicide, death, or disability because of dangerous sports and activities.
A return of the premium is a type of rider added to your insurance plan that states that if you outlive the policy period, you will be paid some or all of the money spent on premium payments.
Yes, riders are available with mostly with all insurance policies. Depending on the insurance company, you will find different riders with different life insurance plans.
Riders often include accidental death, waiver of premium, accelerated death benefit, child term, guaranteed insurability, long-term care, family income benefit, and return of premium riders.
Disclaimer:
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.
PNB MetLife India Insurance Company Limited Registered office address: Unit No. 701, 702 & 703, 7th Floor, West Wing, Raheja Towers, 26/27 M G Road, Bangalore -560001, Karnataka
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Terms & conditions apply, Benefits stipulated are subject to premiums paid and policies in-force. For more details on risk factors, please read the sales brochure and the terms and conditions of the policy, carefully before concluding the sale.
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PNB MetLife Insurance, amongst the trusted Life Insurance companies in India, aims to provide a wide range of Life Insurance products that suits the needs of an individual at every stage of his life. Life Insurance Plans range from Term Life Insurance Plans, Term Plan, Protection Plans, Long Term Savings Plans , Retirement Plans & Child Education Plan.
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