Any good financial advisor will tell you to buy a term life insurance policy the day you start earning. Now when you go to buy one, the sales person will try to sell you all the riders allowed along with the basic policy. Let's first understand what are RIDERS? Riders are additional benefits you can attach to almost any policy you are buying at a cost without having to buy a new policy. Here a customer needs to be aware of the benefit of each rider and then decide which one is required for him.
Riders increase the total premium that is required to pay. But it's a low cost in terms of the high returns one gets from them. IRDA rules do not allow the riders cost to be more the 30%of the base premium. Beware of the sales person who will push you to buy till the maximum limit.
Some very important Riders to be considered are:
WAIVER OF PREMIUM RIDER: This rider is one of my personal favorite. In case of loss of employment due to an accident which renders you completely disabled, you are not required to pay your premiums and your policy continues as is. When you are able to earn and work, you can start paying the premiums from that point.
If you can afford it buy it along with you basic policy or add it whenever you are able to.
FAMILY INCOME BENEFIT RIDER: Incase of insurers death, the family will continue to receive the same amount of monthly income. This insures the smooth running of the family. This rider is available only up to a certain age.
This can be added at a later stage once you have dependents. It is highly recommended if there is a single earning member.
SPOUSE AND CHILDREN INSURANCE RIDER: This rider allows you to add your spouse and children to the existing policy.
You don't have to purchase new policies and can add your family to the existing one at a cost.
RETURN OF PREMIUM RIDER: This rider is specifically for term life insurance. This rider allows you to get all the premium payments back at the end of the policy.
This will significantly increase the premium but this serves as a saving. You get a good amount of money at the end your policy if you survive it.
RENEWAL OF POLICY RIDER: This rider will allow you to renew your life insurance policy at the end of the term without any further medical examination. It is highly beneficial in a scenario where you get an illness like cancer ten years after your first policy; you will be still able to get the policy renewed without any medical tests.
In older age chances of diseases increase and this rider will let you extend your policy very easily.
DOUBLE INDEMINITY OR ACCIDENTAL DEATH RIDER: this rider assures a double amount of the sum insured in case of an accidental death.
While choosing this rider make sure you compare different insurance company's definition of "Accidental" as that can be quite restrictive in some.
CRITICAL ILLNESS/SURGICAL CARE/ HOSPITALIZATION RIDERS: These ensure that incase of certain listed illness, your medical bills are taken care of, while you can concentrate on taking care of your loved ones.
Do compare different companies on what illness they cover and take the one that will provide maximum advantage to you.
Buying a life insurance policy is very complicated process. The insurance policies are structured by the insurance companies which do not allow us modify the policy as per our individual requirements. But these riders can be used by us take care of our individual needs. So study each rider carefully, understand its value and also under the needs of your family to choose the best rider for your policy.
Riders increase the total premium that is required to pay. But it's a low cost in terms of the high returns one gets from them. IRDA rules do not allow the riders cost to be more the 30%of the base premium. Beware of the sales person who will push you to buy till the maximum limit.
Some very important Riders to be considered are:
WAIVER OF PREMIUM RIDER: This rider is one of my personal favorite. In case of loss of employment due to an accident which renders you completely disabled, you are not required to pay your premiums and your policy continues as is. When you are able to earn and work, you can start paying the premiums from that point.
If you can afford it buy it along with you basic policy or add it whenever you are able to.
FAMILY INCOME BENEFIT RIDER: Incase of insurers death, the family will continue to receive the same amount of monthly income. This insures the smooth running of the family. This rider is available only up to a certain age.
This can be added at a later stage once you have dependents. It is highly recommended if there is a single earning member.
SPOUSE AND CHILDREN INSURANCE RIDER: This rider allows you to add your spouse and children to the existing policy.
You don't have to purchase new policies and can add your family to the existing one at a cost.
RETURN OF PREMIUM RIDER: This rider is specifically for term life insurance. This rider allows you to get all the premium payments back at the end of the policy.
This will significantly increase the premium but this serves as a saving. You get a good amount of money at the end your policy if you survive it.
RENEWAL OF POLICY RIDER: This rider will allow you to renew your life insurance policy at the end of the term without any further medical examination. It is highly beneficial in a scenario where you get an illness like cancer ten years after your first policy; you will be still able to get the policy renewed without any medical tests.
In older age chances of diseases increase and this rider will let you extend your policy very easily.
DOUBLE INDEMINITY OR ACCIDENTAL DEATH RIDER: this rider assures a double amount of the sum insured in case of an accidental death.
While choosing this rider make sure you compare different insurance company's definition of "Accidental" as that can be quite restrictive in some.
CRITICAL ILLNESS/SURGICAL CARE/ HOSPITALIZATION RIDERS: These ensure that incase of certain listed illness, your medical bills are taken care of, while you can concentrate on taking care of your loved ones.
Do compare different companies on what illness they cover and take the one that will provide maximum advantage to you.
Buying a life insurance policy is very complicated process. The insurance policies are structured by the insurance companies which do not allow us modify the policy as per our individual requirements. But these riders can be used by us take care of our individual needs. So study each rider carefully, understand its value and also under the needs of your family to choose the best rider for your policy.
SHARE
