Riders

These are optional benefits offered in life covers in addition to the main policy. Here’s a look at some of the commonly available riders and why they can save money

What are riders?

Riders are additional insurance benefits that are attached with the main life insurance policy. They get terminated once they are used or when the main policy itself terminates. Not only do riders expand the insurance cover, they are also, usually, cheaper than buying policies to get similar covers. Riders are usually taken at the time of buying an insurance policy. Sometimes, however, you can also attach them in the course of the policy term.

What riders are available?

Riders can be used to enhance the insurance cover. What riders are offered depends on the type of the base insurance policy Insurers typically provide the following riders:

• Level term cover. A term insurance policy in which the life cover can be enhanced for a limited period. The increase can be up to the value of the sum assured on the base policy.
• Critical illness rider. This rider offers a lump sum benefit to the insured if he is afflicted by a critical illness like cancer or leukemia as specified in the contract of the policy.
• Accidental death or disability benefit rider. It provides a lump sum cover to the insured for death or disability due to an accident.
• Waiver of premium rider. This is an essential part of child insurance policies. This rider waives off subsequent premiums if the insured or the earning parent dies or is disabled and unable to continue paying the premiums. If this happens, the insurance company pays the remaining premiums.
• Hospital cash benefit rider. It provides a pre-specified sum of cash for each day the insured is hospitalised. The number of days of hospitalisation during the entire term for which this rider is available is specified in the policy.
• Major surgical benefit rider. It gives a lump sum to the insured if he undergoes any specified surgery.

Why are riders cheaper?

Since riders come as attachments to a main insurance policy, with them insurance companies are able to save on the administrative costs associated with maintaining a separate policy. This way riders are usually a cheaper option than additional policies. Riders are usually taken at the time of buying a policy and the cost of buying one is clubbed with the premium that you pay for the base policy.