Life insurance is predominantly a contract between an insurer and a policyholder. This policy offers to pay a sum of money to beneficiaries when the policyholder dies. The money is paid in exchange for the premiums which are paid by the policyholder during his/her lifetime. However, a basic life insurance policy may not be sufficient.

In this article, let us understand what life insurance riders are, and take a look at some of the common ones.

What are life insurance riders?

They are essentially add-ons that can be purchased with your basic life insurance policy. These riders allow you to customise your policy. They also offer you various kinds of protection if you meet the rider’s conditions.

Some of the life policies come with in-built riders. You can assess your needs and then select a rider that best suits you. However, for every add-on rider, you will have to pay an additional fee.

What are the common life insurance riders?

Accidental Death Rider:

As the name suggests, this rider pays out an additional amount of death benefit if the insured dies in an accident. Generally, the additional benefit paid out in case of the policyholder’s death due to an accident is equivalent to the face amount of the original policy.

Waiver of Premium Rider:

This rider comes in handy, if the policyholder meets with an unfortunate event that leads to his/her permanent physical disability. In such scenarios, the premium due on the base policy is waived off until the policyholder is ready to work again. This rider is beneficial, especially when the premium on the policy is high. The definition of the term “totally disabled” may differ from insurer to insurer, hence, it is advisable to read the terms and conditions of your riders.

Accelerated Death Benefit Rider:

Under this rider, the policyholder can receive a payout against the death benefit if he/she is diagnosed with a terminal illness that is likely to shorten their lifespan. Many times, individuals who are diagnosed with a terminal illness and have less than one year to live tend to use this rider. They use the payout for their treatments and other daily needs.

Given the fast-paced lifestyle today, having a rider can come in handy to customise financial coverage offered by life insurance policies. Before you opt for any life insurance rider, it is always wise to read the terms and conditions. If required, seek an insurance advisor’s help to evaluate the benefits and select the one best suited for your needs. An insurance advisor can also guide you to use various tools such as the life insurance calculator.