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subject: How Important Riders Are In Life Insurance [print this page]


How Important Riders Are In Life Insurance

If given a choice you would favor a customized product than the one which cannot be customized, isnt it? Besides providing the utility value, the product serves you the way you want and in turn it is value for money. Same thing goes with life insurance, you have the choice to add riders to your life insurance policy and customize your life insurance plan according to your own preferences and individual situation.

What are life insurance riders?

Riders can be defined as additional provisions basically to extend or limit the insurance coverage availed from basic life insurance plan. Every rider comes with an individual price and adding it to your life insurance plan will increase the premium nominally. There are some common life insurance riders offered by insurance companies. Lets see how they work and add utility to life insurance products.

Accidental death benefit

It is the benefit rider in which additional amount is paid above the specified sum assured in case of event of death of the insured due to the accident. The disbursement amount depends on the terms and conditions of the policy purchased.

Permanent disability: The benefit from this rider is paid only on permanent disability of the insured as a result of the accident. The amount of sum assured on rider is paid as part or whole according to the severity of disability.

Waiver of premium: The rider becomes active when the insured is unable to pay premium due to illness or permanent disability to work. The insurer waives all the future premiums which help the insured to continue the policy and avail the benefits of the policy.

Critical illness

When this rider is purchased the insured is paid specified sum assured if any critical illness is diagnosed and this amount can be spent in any way the insured wants. However, the critical illness should be specified in the list of the critical illnesses of the insurance company which may vary from company to company.

Why riders are important?

Riders are important part of any life insurance policy. Lets discuss how important they are and what purpose do they serve.

No need for other policy

There are so many life insurance plans available in the market each one with its unique features; you may feel the necessity of a feature that is a part of other insurance plan and may be you think it is worth buying the other plan too. But, if you get the choice to add that feature to your life insurance plan, there would be no need to buy the other plan.

No need for paying double premium amount

Since, you have bought the rider and you do not need to buy another plan to avail the benefit, the premium amount for the second insurance policy you would have paid is saved. And, instead of paying premium for that second policy you have to pay just a meager amount to avail that benefit.

Riders besides adding utility, make your life insurance plan an economical one and in turn make it a best life insurance plan as per your individual state.

Only the thing that should not be ignored is that once you raise the insurance claim against any of your rider, the respective rider would come to an end. Still, this does not decrease the significance of having riders in life insurance policy; therefore always get life insurance policy with most useful provisions called riders.

by: easypolicy




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