Riders are the additional benefits that you may buy and add to your policy. They are options that allow you to enhance your insurance cover, qualitatively and quantitatively. Riders can be mixed and matched based on one’s preferences for a small additional cost. As ‘one size fits all’ approach does not apply to insurance it makes sense to cover risk based on factors that are unique to you. Simply put, these are add-on benefits attached to policies in case of eventualities.

Here are a few riders and what they generally cover :

Level term cover rider

·         This provides you the option to enhance your risk cover for a limited period, up to a maximum of the sum assured on your base policy.

·         It solely offers death benefit and helps the survivors to meet any unforeseen expenses that need to be taken care of, or some liabilities to be cleared of in event of death of the policyholder.

·         For example - Your need for life insurance cover is Rs 10 lakh. If you take a policy for a sum assured of Rs 10 lakh, you would have to pay a high premium whereas if you go in for a Rs 5 lakh life cover, and add a term rider for Rs 5 lakh, you can satisfy your insurance requirement at a far lower premium. Although, the survival benefits will be proportionately lower in this case, the basic need for life insurance is met at a far lower cost.

Double sum assured rider

·         This provides for an additional amount equivalent to the basic sum assured to the survivors in case of an unfortunate death of the policyholder

·         With a little extra premium the policyholder can double his life cover at a nominal cost as compared to opting for a larger endowment policy.

·         It is commonly found that the policyholder is the main source of income of the family and in case of an unforeseen event of his death, his survivors are likely to need more money to manage the household, thus the double sum assured rider caters to such a situation.

Critical illness rider or dreaded disease rider

·         This rider is added to a life insurance policy to protect the insured in the event of a critical illness.

·         Generally, the extra cover is equal to the sum assured on the base policy and is paid upon diagnosis of the illness.

·         While the illnesses covered and the premiums vary among insurers, most insurers cover cancer, coronary artery bypass, heart attack, kidney/renal failure, major organ transplant and paralytic stroke.

·         Before adding this rider one must check illnesses covered and the exclusions.

·         And, a few insurers terminate the base policy once a claim is made on the rider. Thus, a plan that continues to give you life cover, at marginally higher premium on the rider, is preferable.

·         The main difference between a critical illness benefit and a mediclaim policy is that under the critical illness benefit the policy holder gets an amount equal to the sum assured irrespective of the medical expenses on diagnosis of the critical illness while under a mediclaim policy the policy holder receives a reimbursement on producing the bills which is limited to the extent of amount medical expenses incurred.

·         The premium paid for this rider qualifies for tax deduction under section 80D of the IT Act

Major surgical assistance benefit

·         This rider provides financial support in the event of medical emergencies that require surgery in addition to the base policy.

·         When this clause is triggered, a part of the sum assured is paid to the policyholder.

·         You must check the list of surgical procedures covered and the exclusions.

·         Most insurers exclude claims arising from pre-existing injuries or illnesses and other predefined specific events

·         Also, expenses on hospitalisation for ailments that do not require surgery are not covered.

·         The premium paid for this rider qualifies for tax deduction under section 80D of the IT Act

·         The premium varies in a large range because only some insurers allow the base policy to continue once a claim is made on the rider.

Accident and disability benefit

·         This provides for an additional cover on the base policy, in the event of accidental death to cover the risk of your becoming disabled–either permanently or temporarily, totally or partially–following an accident.

·         In case, the accident results in total and permanent disability, the rider provides for other benefits: a proportion of the benefits will be paid to the insured person every year until he recovers.

·         Some insurers provide a waiver of premium benefit as well, in the event of disability; a few insurers offer a clause that provides for compensation in the event of accidental dismemberment.

 Waiver of premium rider

·         This rider is triggered when the insured person becomes "completely disabled" or loses his source of revenue because of unemployment owing to an injury or sickness.

·         Thereby, the premiums due on the base policy (and other riders, if any) are waived till the person is able-bodied and employed again.

·         Effectively, this rider acts as a "disability insurance" against your life insurance policy.

·         The merits of this rider are evident, particularly if the premium on the policy is high. Without this, you are at risk of seeing your policy lapse if you don’t pay the premium owing to financial difficulty in the event of your becoming disabled.

·         The definition of the term "completely disabled" varies between insurers.

·         The premium for this rider depends on the premium on the base policy and on other riders. The higher the premium on the base policy, and the more the riders you add, the higher will be the premium you pay on this rider.

·         The premium paid for this rider qualifies for tax deduction under section 80D of the IT Act

Guaranteed insurability option rider

·         This rider gives you the right to purchase additional insurance (of the nature of your base policy) at different stages, without further medical examination.

·         This rider is useful if you need to buy additional insurance to keep pace with changing life circumstances–as when you get married or have children.

·         And, even though your health condition may deteriorate with age, you don’t have to give any medical evidence of insurability.