The rising cost of living due to inflation forces you to spend your income more on household expenses. This means fewer savings and investments for the future. If you happen to be the sole breadwinner of your family, your sudden demise could push your family into financial turmoil. However, you can ensure that your family gets the financial coverage they deserve with the help of a life insurance policy.
There are different life insurance plans in the market that you can select from. However, you can enhance the coverage beyond just financial compensation. This is done with the help of riders. What exactly are these riders in a life insurance policy? Read on to find out.
What is a life insurance policy?
A life insurance is a type of policy wherein the insurer financially compensates the policyholder’s family. This compensation is given in the event of the policyholder’s untimely demise. This amount is known as the sum assured or death benefit. As there are different life insurance plans, the amount disbursed by the insurer is based on the plan you purchase. It helps your family remain financially stable for the foreseeable future, especially during life risks.
What are riders?
Riders are components that you can include in your policy to enhance its coverage. Different riders are available based on the type of policy your buy. Do keep in mind that adding riders to your policy also increases its cost. Only include the riders that are necessary to keep the premium in control.
What type of riders are there in life insurance?
When it comes to life insurance plans, there are different types of riders and life insurance riders plans that are available at your disposal. Listed below are a few of them:
1. Disability rider
If you are involved in an accident which causes total and permanent disability, the rider will financially compensate your family. This rider acts as an income replacement if you are the sole breadwinner of your family, and the disability causes you to lose your source of income.
2. Accidental death benefit
If you are involved in an accident which causes your immediate demise either suddenly or after a certain period, this benefit will provide financial compensation to your family. Do keep in mind that insurers have a specific definition of accidental death. You can look for it in your policy document.
3. Premium waiver rider
As the name suggests, this waiver basically waives off whatever remaining premiums are to be paid towards the policy. This rider comes in handy if the policyholder is totally disabled and not able to pay the premiums under any circumstances. This rider ensures that the policy remains operational. However, do keep in mind that the unpaid premiums would be deducted from the policy’s sum assured.
4. Critical illness rider
There are certain diseases that are termed as critical illnesses. As the cost of treatment for such illnesses is much higher, this rider can be of great assistance. It provides financial assistance in the event you get diagnosed with a critical illness. Your insurer has a pre-defined list of illnesses that qualify as critical illness. Do check this list when you are purchasing your policy.
5. Hospital expense rider
In this rider, if the policyholder gets admitted into a hospital, they will be given a fixed financial compensation based on the number of days of hospitalisation and the charges related to it.
6. Income rider
If you, as a policyholder, were to pass away suddenly, this rider will help in ensuring your family gets a fixed monthly income from the insurer. These instalments will help them manage daily expenses while relying as little as possible on the savings.
These are some of the riders that you can include in your life insurance coverage. Do keep in mind to review your requirements related to riders as too many riders can increase the cost of your policy. You can see how much your policy would cost with these riders by using a life insurance premium calculator.