What are life insurance riders?
Life insurance riders are added coverage features that you can add to your base policy to extend the scope of financial protection. The riders cover specific contingencies, like critical illnesses, accidental emergencies, etc., and pay benefits if the covered contingency occurs.
Riders come at a small additional premium but offer wider coverage. This is why it makes sense to add riders to your basic life insurance policy for all-round protection.
Important riders to consider
There are various riders available in the market. However, some of the most common and important riders include the following –
Accidental death and disability benefit rider
As the name suggests, the rider covers the following contingencies –
- Accidental death
- Accidental total and permanent disability
- Accidental total and partial disability (offered by some insurers)
In the first two instances, 100% of the rider's sum assured is paid. However, in the case of partial disablements, a specified percentage of the sum assured is paid depending on the nature and severity of the disability.
Critical illness rider
The critical illness rider covers a list of specified critical illnesses and surgical procedures. Common illnesses covered include cancer, first heart attack, stroke, multiple sclerosis, etc. If the life assured is diagnosed with any of the listed covered illnesses, the entire rider sum assured is paid in a lump sum.
You can use the rider benefit received to avail of advanced medical treatments, pay off existing liabilities or even save it for your family’s future needs.
Waiver of premium rider
The rider waives the payment of future premiums if the life assured suffers from a critical illness, permanent disability or death in some cases. The life insurance policy continues unaffected, and the premiums are paid by the insurance company on behalf of the policyholder.
Income benefit rider
The rider pays a fixed monthly income to your family in the case of specified contingencies. Common contingencies covered under the rider include death, permanent disability.
The income benefit is paid at a specified rate and up to a specified number of years, as mentioned in the rider’s terms and conditions.
Why choose life insurance riders?
Some of the reasons which make life insurance riders a good choice are as follows –
Added financial protection
The main purpose of a rider is to enhance the scope of financial protection of your life insurance policy. By covering other contingencies like accidental deaths, disabilities, and critical illnesses, riders make your life insurance policy an all-around financial protection tool. The riders provide you or your family with the much-needed financial assistance to tackle an emergency head-on.
Affordability
The riders premiums are nominal and affordable. By paying a small additional amount , you can get an added layer of security.
The affordability of riders makes them easily accessible and suitable for all individuals.
Tax benefits
The premium paid for critical illness riders allows you an added tax deduction under Section 80D up to ₹25,000. If you are 60 years or above, the limit increases to ₹50,000. This deduction helps you lower your tax liability in India and save more.
How to choose life insurance riders?
When it comes to buying life insurance riders, one size does not fit all. Though the aforementioned riders are some of the most common and important ones, their choice depends on your coverage needs and availability with the plan.
So, when buying riders, assessing your risks is important so that you can choose suitable ones when buying life insurance plans. For instance,
- If you are buying a child insurance plan, the waiver of premium rider would be a good choice, if not already inbuilt under the plan. The rider can ensure continued savings for your child’s future even if you are not around.
- The accidental death and disability benefit rider is suitable for most individuals to protect against the uncertain risks of accidents.
- Given the increasing incidence of illnesses and diseases, a critical illness rider is also a suitable choice for most NRIs.
- If you want to replace the source of income for your family in your absence, you can choose the income benefit rider.
You can choose one or more riders with your life insurance policy for added protection. So, assess your coverage needs and combine suitable riders smartly for all-round protection.
Conclusion
For NRIs living in Singapore, life insurance plans, complete with suitable riders, can act as an effective shield against life’s uncertainties. While the base life insurance policy helps cover the risk of untimely demise and helps you save, riders can offer added protection at minimal costs.
Do not consider riders as optional features. When chosen and combined rightly, they can act as strategic financial protection tools. So, assess your coverage needs and opt for riders to make the most of your life insurance policy.
FAQs
What is the maturity benefit payable under a rider?
Riders do not have any maturity benefit. They pay a benefit only if the contingency covered by them occurs. If the contingency does not occur, no benefit is paid. For instance, if you choose the critical illness rider and do not suffer from any covered illness during the policy term, nothing would be payable.
Can I remove or add riders to my life insurance policy mid-term?
Usually, life insurance policies allow you to add or remove riders mid-term1. However, such changes are permitted only on policy anniversaries2 and depends upon plan and insurer. Moreover, the premium payable for the policy would change depending on the riders added or removed2.
Is the rider sum assured different from the sum assured of the base life insurance policy?
Yes, the rider sum assured is independent of the sum assured of the basic life insurance policy. It is an additional benefit that is paid over and above the sum assured of the base life insurance policy if the conditions of the rider are met.
An ISO 9001:2015 
