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Riders in Life Insurance – The key for Extra Protection

Riders in Life Insurance

Riders are simply the add-ons that can be added to the insurance policy to take out extra benefits from the policy, adding a rider means the same as adding extra veggies to your pizza, as there is a choice for adding veggies to pizza similarly there are different types of riders which can be added to the life insurance policy to make it much better, we have explained everything about riders that a policyholder needs to know, so stay till the end.

What are Riders in life insurance?

Riders are add-ons that can be added to your insurance policy to make it much better as it provides extra protection and benefits to the policyholder, if a policyholder wants to add any rider to his insurance policy then he has to pay the additional amount of premium along with the base insurance policy premium.

Riders are a very important part of the insurance policy as any single policy cannot cover everything a policyholder wants to be covered but adding a rider to the insurance policy can help him get his extra needs covered which are not included in his basic insurance plan.

Example: Mr. Shubham had purchased a basic term insurance plan with a life cover of Rs.1 Cr also he added the accidental death benefit rider with the additional coverage of Rs. 25 L, so in case Mr. Shubham dies during the term period of the policy and the reason of death is accident then the nominee of Mr. Shubham will get Rs. 1.25 Cr upon the death of Mr. Shubham, but in case the reason for death is other than accident then additional 25 L will not be paid.

You can only add the riders that are available with your insurance policy, different types of riders provide coverage for different needs.

Note: It is not compulsory to add a rider, if the policyholder needs then he/she can add riders otherwise continue buying the insurance policy without adding any rider.

Types of Riders in life Insurance

Different riders come with different benefits, so let’s understand some of the best riders that can enhance your insurance policy.

  •  Return of premium rider: If a policyholder dies during the term period of the term insurance plan then the insurance company will pay the sum assured (death benefits) to his nominee but in case the policyholder outlives the term period of the policy then in that case nothing will be paid neither to the policyholder nor his nominee, but if you have added the return of premium rider to your insurance plan and you outlives the term period of the policy then the entire amount of premium which you have paid to the insurance company will be refunded to you at the time of policy’s maturity.
  • Waiver of premium rider: Adding the waiver of premium rider to your insurance policy means your policy will remain to continue and you will enjoy all the benefits as stated in the policy even if you are not in the condition to pay the premium, the insurance company will bear the amount of your policy’s premium in case you become critically ill or physically disabled during the term period of the policy.
  • Critical illness rider: The critical illness rider provides immediate financial help to the policyholder in case the policyholder gets diagnosed with any critical illness diseases during the coverage period of the policy, but financial help is only provided if these critical illness diseases are included in terms and conditions of the policy.

The amount received against the critical illness rider is separated from the maturity benefits or death benefits but in some cases this amount is not separate and deducted from the sum assured of the policy.

Critical illness diseases are very dangerous diseases and can lead to the death of human beings, some of the critical illness diseases are cancer, heart attack, kidney failure, stroke, tumor, coma, brain surgery, etc.

  • Accidental death rider: Adding this rider to the base life insurance policy means that in case the policyholder dies during the term period of the policy and the cause of death is due to accident then an extra amount of sum assured will be paid to the policyholder’s nominee, which will be somewhat equal to the amount of sum assured of the base insurance policy that means upon the death of the policyholder his nominee will get 2x sum assured of his policy.
  • Accelerated death benefit rider: This rider is also known as terminal illness rider, adding this rider to your life insurance policy will allow you to withdraw some amount of your policy’s sum assured if you are diagnosed with any terminal illness disease during the term period of the policy, but to withdraw funds from your life insurance policy you have to first prove your illness to the insurer. The remaining portion of your policy’s sum assured will be paid to your nominee upon your death.
  • Term conversion rider: This rider works with the term insurance plan, adding this rider to your term insurance policy allows you to convert your term insurance into the whole life insurance anytime during the term period of your policy without undergoing any medical tests, you can initiate conversion before your term plan ends.

The premium amount for the whole-life policy is higher than the term insurance policy, so after conversion your premium amount will be increased.

  • Income benefit rider: This rider ensures the financial security of the policyholder’s family till the specified period upon the death of a policyholder during the term period of the policy, adding this rider to your policy guarantees to pay a predetermined amount of money per month to your nominee till the specified period of time, instead of paying the whole amount of sum assured one time.
  • Guaranteed insurability rider: The guaranteed insurability rider allows you to increase the amount of the sum assured of your life insurance policy during the term period of your policy without even undergoing a medical test.

Benefits of Riders

Riders come with various benefits, some of the great benefits of riders are:

  • Tax benefits: Riders provide tax benefits to the policyholder, policyholders can get income tax exemption up to Rs.25000 under section 80D on buying riders such as critical illness rider, accidental disability rider, surgical care rider, and other health-related riders.
  • Extra coverage: The coverage provided by the riders are separate from the coverage of the base insurance policy, so adding riders extends your insurance coverage.
  • Extra protection: Adding riders to the insurance policy provides us and our family more protection against the unforeseen future. Ex: Adding the Critical illness rider pays a lump sum amount of money immediately to the policyholder if he gets diagnosed with any critical illness disease which is covered in the rider.
  • Allows customization: Riders helps us to customize our insurance policies as we can add riders to our insurance policies to get our specific needs covered which our base insurance policy is not covering.
  • Less expensive: It is a less expensive way to get our different needs covered because buying separate insurance policies for different needs will cost us very high.

How to Select Riders

Follow these steps:

1). Firstly, take a look at which riders are available with the policy you are going to buy

2). Analyze the benefits of every rider

3). Think practically and  place yourself in every situation, you will get to know the best riders which really needs to be added to your life insurance policy

4). Now, add the rider to your policy that suits your need, and then an additional amount of premium will get added to your base life insurance policy’s premium

5). Pay the total amount of premium


Now we have come to the end of this article and I know that after reading this article you must have understood how important riders are in insurance policies, we have explained almost everything about riders in very simple language and I hope you like the content.


Q1: Can riders be added later after buying a policy?

A1: Yes, you can add riders later after buying the insurance policy, but adding riders is not possible in some cases.

Q2: Do I get any tax benefits on purchasing a critical illness rider?

A2: As it is a health-related rider so you will get tax benefits under section 80D, you will get income tax exemption up to Rs.25,000 per annum on paying for a critical illness rider.

Q3: Can I remove a rider during the term period of the policy?

A3: Yes, you can remove riders anytime during the term period of your insurance policy.

Q4: How much do I have to pay for adding a rider?

A4: Generally, the cost of each rider ranges between 5-10% of the base policy premium.

Q5: Can I add more than one rider to my life insurance policy?

A5: Yes, you can easily add one or more rider to your insurance policy, but you have to pay the additional premium for each rider that you want to add.

Q6: Can I purchase a rider without purchasing any insurance policy?

A6: As riders are the add-ons for the insurance policies so you cannot purchase any rider all alone you need to purchase an insurance policy first then you can add riders to it.

Q7: Does the option of adding riders come only with a life insurance policy?

A7: No, you can also add riders to your general insurance policy, some of the riders that comes with the general insurance policy are zero depreciation rider, roadside assistance and towing rider, vehicle replacement, etc.

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