What are riders in Insurance?
Extra additional benefits in your base insurance policy at a minimal cost. As the premium for riders would not exceed more than 30% of your basic premium.
Example: Annual Base Premium of the Policy = 100000, then rider premium would be limited up to 30000 only. Featured riders available are as follows:
Critical illness Rider: If the insured has been diagnosed with any of the critical illness listed in the insurance policy documents during the policy term, then the benefit of the critical illness rider is paid to the insured upon the condition of survival of the insured for 30 days post critical illness.
Accidental death benefit rider: Additional benefits provided to the nominee of the life assured. The sum assured in this rider is either equivalent or less than the base sum assured.
Example: A person buys a term insurance policy of base sum assured = INR 10 million. In that case, the accidental death rider benefit will not exceed INR 10 million.Accidental disability rider: If the insured faced any bodily injury, disability or permanent disability of the limb of any bodily injury or disability of the limb due to accident listed in the policy documents, then the insurer is liable to pay the benefits to the insured.
Waiver of premium Rider: If the insured dies or permanently disabled, in this case the policy remains continue and all the future premiums are waived off and benefits payable to the nominee upon the maturity of the policy.
Example: A person buys an Endowment Plan for the policy term 10 years and a premium paying term 10 years and dies in the 4th year, then the remaining 6 years, premiums are waived and at maturity (10th year), the nominee will get full benefits as mentioned in the policy documents.
Surgical Riders: If the insured person comes across any surgery which is listed in the policy documents, then the insurance company is liable to pay benefits to the insured.
Generally, this rider comes with a waiting period of 1 – 2 years.
Term Rider: If the life assured, died in a particular term defined in the rider of the insurance policy documents, then the additional benefits mentioned in the rider are payable to the nominee.
Example: A person buys term life insurance for 25 years with a term rider of 10 years, starting from the inception of the policy term. In this case if the person dies in the 5th year of the policy, then the additional benefit of the term rider is payable to the nominee.