How do riders help the customer in a life insurance policy?
Life is full of uncertainties and it doesn’t fit into any set mould. Adversity is never coming up with prior notice. It can happen anywhere and could affect you adversely specifically in terms of the finances. Therefore, it is of prime importance to have a life insurance policy. Make sure that the life insurance policy details are correct and no faulty information is given to the insurer.
In case you are thinking what is a life insurance policy? In this article, we will tell you about the life insurance plan and the rider options that should be considered by you and included your plan.
What is a Life Insurance Policy?
In the simplest words, a life insurance policy will secure your family from any crisis in terms of finances in case you are no more tomorrow.
It essentially implies that it covers the risk of untimely death. This also can be considered as an income replacement instrument. Now, that you have an idea of what is a life insurance policy.
Now, let us move ahead and understand the importance of riders in a life insurance policy. However, while buying the plan be alert and do not miss out any important and relevant information. The life insurance policy details are of utmost importance specifically when it comes to a claim, renewal or so forth.
Just because you have a life insurance plan does not mean all the risks are covered.
The policyholder may meet with an accident that could lead to a partial or even permanent disability. Such an unfortunate accident can easily affect the earning capacity specifically if the person is a breadwinner of the family. It is also possible that one might not be able to pay the life insurance premium that will lead to plan being inoperative, which means that the ultimate goal of purchasing the plan will also not be met. It could also lead to hospital expenses during the policy term. Now, invoking the base policy might be allowed or might not be. Moreover, what if somebody wishes to enhance the coverage with an existing plan at a nominal cost?
Too much of queries right? And the simple answer to all the ifs’ and what is including the riders of life insurance policy, which comes handy in such perilous situations. Now, let us get into the nitty-gritty of the same.
First things first!
What Does a Rider Mean in the Insurance Policy?
In the simplest words, the riders are the add-ons that increase the benefits of the life insurance plan. These are completely alternative supplement that could be hooked up on the basic life insurance policy broadening its scope. You can customize the life insurance policy and select the riders as per your requirement and increase your financial protection.
The riders are designed as optional add-ons that cater to requirements of an array of customers. The riders could be bought upon the base policy and one should include the add-ons by paying a nominal cost. Now, as you are clear in regards to what is a life insurance policy and the riders.
Customize the life insurance plan and maximize the value of the existing life insurance plan.
What are the Types of Riders in Insurance?
Listed below are the rider options available that would help you to make the life insurance policy more enhanced:
- Waiver of Premium Rider: There could be a situation wherein the policyholder is unable to make the life insurance premium payment due to a disability or an illness that could be critical. With this rider, all the future premiums are waived off. The only aspect is that the policy should be in force until the date of expiry. Likewise, the benefits of the plan will continue and be even paid as per the plan. Any policyholder who does not have this rider, if they ever fail to pay the premium then the policy will expire and no benefit shall be paid.
- Terminal Illness Rider: When the policyholder has opted for this benefit rider, then one will be able to obtain a part of the assured sum of the plan in case the policyholder is detected with a terminal illness. In the case of hospitalization, the medical expenses towards the treatment of a terminal illness are upon a higher side, which can easily be a burden upon the family financially. With this rider benefit, it permits the family of the policyholder to use the sum assured part and pay the incurred treatment expenses.
- Accidental Disability Benefit Rider: In case when the policyholder meets with an accident or a mishap that leads to disablement whether permanent or partial then with this rider benefit the insured would receive the complete sum assured or the percentage of it upon the premise of the sort of disability. It is to be noted that this rider will only be valid if the disability has been caused to an accident.
- Accidental Death Benefit Rider: Within this rider benefit, if the policyholder meets with an accident that leads to the demise then the nominee will obtain sum assured additionally. The sum assured could easily differ from one insurance company to the other. It is also possible that the insurance plan might put a cap upon the highest sum assured that is permitted on this rider. It is to be noted that the nominee will receive the basic sum assured if an accident is not the cause of the demise of the policyholder.
- Critical Illness Benefit Rider: When the policyholder chooses for this rider, then they obtain a lump sum amount in the case when diagnosed with an illness that is critical as defined within the plan’s terms and conditions. The critical illness includes heart ailments, paralysis, stroke, organ failure, kidney, and so forth.
Wrapping it Up
The riders to the life insurance policy are designed to provide extra coverage that makes the plan more suitable and takes care of every need. The life insurance policy details will include information such as the policy number, name, date of birth, etc. Keep the information handy all the policy documents safely.
Before you choose the rider benefit option, it is more important to understand the coverage that is provided by them. Moreover, the rider benefit options will always vary from one insurer to the other. We all understand that the future is unpredictable; however, riders would help to protect and secure the financial future of your loved ones in case of any misfortunate accident or incident.
Having a contingency plan in place is of no harm rather it ensures peace of mind for everyone and takes care of everything even if you are not there tomorrow
