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Life Insurance Riders: Types, features, benefits; Here is all you need to know

Priyadarshini Maji
life insurance, add ons, critical illness, waiver of premium, term plan, accidental benefit, IRDAI , unit-linked life insurance products ULIPs, lapsed policy, Partial withdrawal, pension plans, surrender value

It is commonly seen that people who have taken huge loans are suggested to opt for a comprehensive life insurance cover. This ensures that their families do not struggle to repay the loan in case something happens to the bread-earner of the family. Along with a basic life cover, life insurance companies also offer additional benefits to widen the policyholders’ protection.

Among the many riders offered, the popular ones are term rider, critical illness rider, waiver of premium rider, and accidental death benefit rider. These riders are add-ons to the primary policy, which offers additional benefits over and above the policy. With these add-ons, policyholders can maximize their benefits to suit their specific needs. Note that, these riders come into play only in case of a specific eventuality.

Here is a lowdown of how these riders work;

Term rider

Term riders are a pure protection plan that offers additional risk coverage in case of death. This can be attached to a basic life policy to get the add-on benefit at a nominal cost. However, note that at the inception of the base policy, the rider can only be attached to non-linked plans.
The premium for this can be paid as a one-time payment or as regular premiums. During the term of the rider, in case of the unfortunate death of the policyholder, an amount equal to the sum assured of the term rider is paid. For instance, the LIC’s term assurance rider provides life cover for the insured, in case of unfortunate death, during the policy period. Additionally, on the survival of the policy term, nothing is payable to the policyholder.

Waiver of premium rider

In case the policyholder dies or becomes partially or permanently disabled in the middle of the policy term, and has opted for the waiver of premium rider, the premium for the policyholder is waived off. The family of the policyholder or surviving parent does not have to pay any more premium to continue the policy. The insurance company pays the rest of the premiums on behalf of the policyholder, the policy continues uninterrupted until the end of the policy term.

Accidental death benefit rider

As the name suggests, accidental death benefit rider provides an additional sum assured to the policyholder’s family, on death due to accident.
This can also be bought with the life insurance base policy as a rider. However, if bought as a separate policy, it offers comprehensive coverage along with a disability cover option. In case of a separate policy, the policyholder also gets eligible for the living benefit, in case of partial or permanent disability leading to loss of income.

Critical illness rider

This cover offers policyholder protection against major critical illnesses, which are at times not covered by health insurance policies. This includes heart and artery, a major organ, cancer, brain, and nervous system benefits. On the first occurrence of any critical illness, mentioned payments can also be made in a lump sum to the policyholder. On payment of CI benefits, the additional rider is terminated, however, the base policy continues.