Everything You Need to Know About Life Insurance Riders

Everything You Need to Know About Life Insurance Riders

Any financial plan must include life insurance, but what happens if the coverage is insufficient for your needs? Riders for life insurance are optional extra coverages that can be chosen at the time of new or renewed policy issuance. These extra coverages are available in exchange for a higher price and offer comprehensive coverage for the same period as the base policy. They give a strong add-on risk cover that boosts event-based financial security and may be used to tailor your insurance policy to meet your needs.

The fundamental coverage of a life insurance policy can be strengthened with the use of reasonably priced life insurance riders. Before or after the insurance is issued, a rider may be added. The precise rider rules, which may differ from company to company, govern whether a rider may be added after a contract has been signed.

Continue reading to learn about the many life insurance riders, each of which serves a distinct purpose and provides a different set of advantages.

What Are Different Life Insurance Riders?

Here is the list of the different life insurance riders.

  1. Accidental Death Benefit Rider: In the event of the life assured’s an accidental death, the Accidental Death Benefit rider provides the nominee with the sum promised and rider benefit. Accidents frequently do not cause the life assured to pass away immediately; in these instances, the insurance provider gives a window of time after the accident happens to provide the promised protection. For instance, the nominee will get a sum promised amount in the terrible event that the life assured passes away within 120–180 days of the accident.
  1. Disability Cover: A disability rider is a good insurance policy if the insured develops a total, partial, or permanent disability as a result of an accident, a stroke, or any other cause. Such an event may have a substantial effect on the breadwinner’s ability to generate revenue in the future. In the event of disability, this rider guarantees payment of a lump sum benefit or an income benefit to the insured and their family.
  1. Return-of-Premium Rider: If you outlive your term life insurance policy, a return-of-premium rider reimburses all or a portion of your premium payments. It may be included in a brand-new or current term life insurance policy.

An expensive return-of-premium rider might triple the amount of your premium. Additionally, any additional insurance costs or any add-ons that you purchased generally are not refundable.

If you want to keep your coverage, some insurers permit you to apply all or a portion of the refund toward a new policy without having to undergo another medical exam.

  1. Waiver of Premium: It makes sure that even if you are unable to pay your premiums, your life insurance policy remains in effect. The result of this policy would be the cancellation of all upcoming premiums with no change to the policy’s benefits.
  1. Term Rider: If the policyholder/insured dies in any circumstance, according to the Term rider, the nominee will be given a lump payment or a monthly income. The amount of the rider benefit may be equal to the life insurance policy’s base plan coverage or it may be a previously decided sum that is specified in the policy.
  1. Income Benefit Rider: Under the income benefit rider, in the unfortunate event that the life assured passes away during the policy term, the family members of the life assured will be given a pre-determined number of monthly installments that are equal to the monthly income of the life assured. This rider will enable the life assured to make sure that, even if they are not present, their family members lead healthy lives.

Why Are Life Insurance Riders Important?

It’s critical to realize that the benefits of the rider end once a claim is submitted under it. However, the original insurance will continue to offer insurance protection following the conditions of the policy.

  1. Allow for policy customization

If you have a life insurance policy that only offers basic protection against the chance of death, you can alter the policy by adding an add-on rider. You can acquire better protection against a prospective danger that may not be covered by your insurance by adding the appropriate rider.

  1. Eliminates the requirement for a second policy –

Life insurance coverage can protect you against a wide range of hazards, including death by accident, severe illness, total or partial temporary disability, loss of income, and many more. However, it is uncommon to encounter a situation in which single insurance offers protection against several hazards. That is why add-ons are crucial in this situation. Without having to buy a different policy to receive the same coverage, you can add a rider to your base plan to get more coverage. 

  1. Make insurance more economical

Having an add-on rider eliminates the need to get a second life insurance policy, as was discussed in the preceding point. One gains the benefit of not having to pay additional premiums for a different life insurance policy as a result. When compared to the premiums required for a fully functional life insurance plan, the premiums for an add-on rider are much lower. As a result, having an add-on also allows you to save a ton of money, which is always beneficial.

Benefits of Choosing Life Insurance Riders

The following are the benefits of choosing life insurance riders.

  1. Extra Coverage: A rider can be added to the primary insurance policy so that you can have complete coverage. For instance, a critical illness rider pays a lump sum that can be applied to other financial obligations outside medical costs, such as housing costs and loan EMIs.
  1. Enhanced Protection: The best course of action would be to add a rider to the base life insurance policy if you wish to select a life insurance rider to offer your family members the maximum level of protection. For a family, the loss of the policy’s only wage earner can be a significant financial burden. Having a rider by your side for additional financial support during such a period can prove to be your family’s best ally.
  1. Special Benefits: A family frequently needs certain advantages to meet their demands. For example, a family with a child support rider and an additional benefit sum attached may subsequently benefit by having their child’s education paid separately and by giving their loved ones a basic sum insured.
  1. Accessibility: Purchasing a rider is far less expensive than purchasing a separate insurance policy. Additionally, depending on one’s needs, one can choose from a variety of riders. In this manner, getting economical insurance coverage becomes simple.
  1. Reduced Management Concerns: Along with the basic life cover, riders are employed. Separate policies for various covers are not only more expensive but managing all of the insurance becomes even more difficult. The purchase of numerous extra base policies is avoided by add-on covers or riders which do not have these issues.
  1. Tax benefits: On the sum paid for your riders, you may also receive tax advantages. For instance, if you paid for an accidental death rider, you may be eligible for a tax-deductible under Section 80C of the Income Tax Act of 1961. Additionally, the Income Tax Act of 1961’s Section 80D provides advantages on premiums paid for critical sickness riders.
  1. Adaptability: The freedom that a life insurance rider provides is another advantage. You can select from a wide range of options and modify your insurance to suit your needs. Numerous factors, including age, gender, and a history of family illnesses, among others, should be taken into account in order to find the rider who is most suitable for you.

Things to Keep in Mind While Selecting Life Insurance Riders

The best life insurance plan must be chosen based on a wide range of financial needs because there are numerous life insurance policies accessible. Before selecting the rider coverage, a thorough evaluation and understanding should be created. Prior to selecting the rider coverages, bear the following in mind:

  • Smart to choose accidental death and disability coverage if your employment involves a lot of driving.
  • Carefully read the terms and conditions to comprehend the advantages and exclusions of the prospective riders. Preferably match the coverage duration of the rider to that of the underlying life insurance plan.
  • Before choosing a rider, make sure the requirements are satisfied.
  • Before making the final purchase choice, speaking with a reputable insurance agent or financial counsellor will assist dispel any uncertainties one may have regarding the advantages of the rider.


Adding an add-on rider to your life insurance policy is the best choice if you want to increase the protection it currently offers. You have a wide range of possibilities because many insurers now offer a variety of add-on covers over insurance plans.

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