In
life, we always wish to protect our loved ones with some form of financial
security. We purchase gold, invest in equity stocks or mutual bonds to give
them necessary security. But due to the rising inflation costs, better lifestyle,
these investments are not sufficient to meet the future scenarios. Therefore,
the modern way that provides complete financial security would be life
insurance policy. There are lot of insurance companies that cater different
customized products with variety of offerings. Right from fuelling investment
needs to meeting different financial goals, they come with many objectives for
the investor. While you have various types of insurance policies in market,
they are also add-ons to supplement life insurance policy with added coverage.
These policy add-ons are termed as “Rider”. Riders vary from insurance
companies, policy structure, workings and costs. Adding a rider increases your
premium to be sure for an extra coverage which is worth the costs. There are
many riders available across the industry such as:
Critical Illness Rider
As the
name suggests, this rider is your added security towards critical illness
scenarios at a minimal cost. It requires the insurance company to pay you a
lump sum if you’re diagnosed with one of the major illnesses specified in the
insurance policy such as cancer, heart attack, stroke, kidney failure and
others.
Term Conversion Rider
It lets
you convert your term policy into a permanent one without undergoing a medical
exam. This would be beneficial to young couples who may start a family and want
to then convert for life-long coverage. It is most often a feature of a term
insurance contract that is added to the policy at no costs.
Waiver of Premium Rider
This
rider gives waiver so that you don’t have to pay the premiums on your life
cover when you are struck with total disability and cannot work. Most companies
limit policy till 65. So, just in case you are disabled during the old age for
longer than six months, your premiums will be waived and, depending on the
policy, the premiums you were paying for the previous six months will be
reimbursed.
Disability Income Rider
This
rider is a vital one as it sets a regular income for people who are totally
disabled and cannot work. The policy will specify the amount of income and how
long it will be paid. While some riders only pay if you became disabled from an
accident others pay for an accident or illness.
Spousal Rider
It
allows you to give extra insurance cover to your spouse instead of buying two
separate life insurance policies.
It provides term coverage for a specific period of time. So why not just go
ahead, and give your spouse the best gift ever?
Return of Premium Rider
With
this rider, you pay higher premiums for the opportunity to get all of your
money back if you live past the term on your insurance policy.
There
are various factors to consider when buying an insurance cover. The amount and
type of cover depends on factors like your family members & their future
needs, income source, debt, lifestyle, asset in hand, inflation costs etc. Also
it determines on your risk taking ability as well. It is advisable that you never
set a policy premium beyond your income sources else if you cannot afford to
pay premium in time your policy might lapse. Life insurance policy is a very
personal decision and should be determined thoughtfully.
Source:
http://blogs.rediff.com/lifeinsuranceplans/2016/06/07/ritikashah11998-14/
