The most important tool you can add to your life insurance policy, is a rider. Riders are additional provisions made to an insurance contract, to extend or reduce the benefits payable by the policy. They can also affect the overall policy quote. Knowing how riders can get you extra benefits is a great boost to your ability to customise your insurance policy.
Critical Illness Rider
This rider covers critical illnesses that may or may not be fatal. To avail this benefit, you need to survive the illness by a minimum of 30 days from the date of diagnosis. The downside is that the rider would be subsequently terminated. However, the base policy would continue uninterrupted, with regular premium payments required.
Accidental Death/Disability Rider
This is the most commonly offered rider. It ensures that in case of death by accident, the beneficiary gets twice the sum assured stated in the original policy. In addition, it also covers disability in case of an accident that does not result in death. If there is a loss of more than one limb, or sight in both eyes, or loss of one limb and sight in one eye, the beneficiary gets twice the value of the original policy. If there has been loss of one limb or sight in one eye, half that value is paid. Once the payment has been maid, this rider is terminated.
Income Benefit Rider
This rider guarantees you the benefit of income lost, along with sum assured, in the event of the insured’s demise. That is, if the person whose life is insured passes away, the family will not only be paid the policy cover, but also a monthly income to make up for the loss of income generated by the death. These income payments are made for the duration of a set number of years, which are defined within the rider.
Waiver of Premium Rider
In the event of an unforeseen circumstance that leaves you unable to pay your premium, this rider is the most useful provision to have in your insurance policy. You will be released from further premium payments, but the policy cover will not be terminated. As such, it is one of the most beneficial riders to have.
These were the most important riders currently available on life insurance policies. Most are inexpensive and provide a significant number of added benefits to your base policy. However, it is imperative that you read the fine print on each rider very carefully before committing yourself to any of them.
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