Choosing the perfect rider for your life insurance policy

Let’s look at the types of endorsements available and who should ideally buy these endorsements with life insurance.

A rider is a voluntary supplement that you can usually purchase with life insurance. Some familiar riders are Accidental Death Benefit Rider, Premium Waiver Rider, Income Guarantee Rider, Special Exit Value Rider, Premium Interruption Rider , Guaranteed Insurability Option Rider and Critical Illness Insurance Rider.

Rider in the event of accidental death: Accidental death riders promise additional face amount to policyholders in the event of accidental death. Suppose a base policy provides a sum insured of 50 lakh, and the policyholder made use of the accidental death benefit rider for 10,000,000. On the death of the policyholder, the insurer pays 60 lakh to beneficiary beneficiary.

This jumper is essential in today’s life as almost everyone needs to move around for work, business or any other work. “Probably, you are careful when driving. However, you cannot be sure that other people are driving on the road; therefore, this endorsement is essential for people traveling between cities, out of town, or internationally,” said Naval Goel, Founder and CEO of PolicyX.com.

Exemption from the premium endorsement: Typically, a policy automatically lapses when an insured discontinues premium payment due to job loss or disability. However, this endorsement helps an insured to keep the policy active despite non-payment of premium in such cases. It maintains the insured’s right to his policy and gives him access to all of its promised benefits.

According to industry experts, this endorsement helps people who work in vulnerable settings and require frequent hospitalizations that affect their income.

Income Allowance Rider: This endorsement provides the policyholder’s family with an annual income supplement in addition to the insured capital. “Breadwinners with large and extended families may opt for this option as sometimes the sum assured alone is insufficient for the survival of the family which may include elderly parents, children and a spouse with no source of income. This helps support the insured’s family, Goel said.

Critical Illness Rider: This rider pays a lump sum upon valid diagnosis of a critical illness covered by the plan that may be helpful to policyholders or their families in the event of a crisis.

Anyone with a history of serious illness in the family or at risk of contracting one in the future due to their lifestyle can take this rider. Piyush Trivedi, Co-Chairman of Kotak Life Insurance, said, “Given critical illness incidence rates and the impact of lifestyle-related illnesses, this benefit is relevant for all individuals, regardless of age. . If we have yet to identify a segment, anyone 30 and older should have this coverage.”

Return of the premium endorsement: This endorsement helps an insured get a refund of the full premium paid for term insurance if they survive the term of the policy. But if the insured dies during the term of the policy, the sum insured is paid to the agent.

Most people think term insurance is a waste if they outlive the term of the policy. So people looking for a return on their survival can buy this jumper. An industry expert said a conservative investor looking for financial security and protection could buy this endorsement.

Accidental Disability Benefit Rider: If the insured faces permanent or partial disability due to an accident, this rider comes into play. The policyholder can get a regular salary for the next 5 to 10 years after the accident in a specific percentage of the sum assured. This stable income can work as a regular income for the policyholder. People who travel, drive or cycle can opt for this to ensure that no accidental event brings suffering to their family. Trivedi said: “Again, this runner can be taken by all age groups between 18 and 50, with the other runners taken.”

Special Exit Value Rider: This endorsement allows the policyholder to freely choose a time to exit from a policy and receive all premiums paid for the basic protection guarantee. This endorsement can be used when the policyholder does not take the reimbursement of the premium.

According to Goel, people who believe that their financial responsibilities to their family will be over at retirement age and that their family will not depend on them for finances can use this rider. “This pilot is for the masses because it’s free,” he said.

Premium break endorsement: This endorsement frees you from paying premium twice during the policy by taking breaks and keeping the policy active. It helps policyholders pay no premium for a year, during which their policy will still cover them. The first break can only be used after 10 years of insurance, if the policy is in force. The policyholder can only exercise the second premium interruption after a minimum of 10 years from the first premium interruption.

According to industry experts, this premium can help policy buyers in the 30-35 age group who want to take a break from insurance premium payments to meet their other responsibilities such as fees. children’s schooling or surgery in the future.

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Earnest L. Veasey