Types of Life Insurance Riders

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Types of Life Insurance Riders

Posted On : Sep-29-2010 | seen (1014) times | Article Word Count : 664 |

When we talk about potential future losses, we might come across a situation where a loss may not happen at all. There should be proper understanding about the insurance policies before you own it.

Insurance riders provide benefits over and above those given by a basic insurance policy. Riders are not free and come at an additional cost, but the cost is relatively less compared to that involved in taking a separate insurance policy to cover the same requirements. Some of the very essential and well known riders include accidental death rider and critical illness rider. Beside these, other important riders (their importance varies from person to person) depending upon one’s age, stage of life and future goals, include accidental death, disability or dismemberment rider, level term rider, waiver of premium rider, guaranteed insurability rider and family income benefit rider.
• Accidental Death Rider: The rider provides extra benefits equal to the minimum sum assured while taking the base policy. It is applicable only if the insured dies during the policy term due to accident. Since in most cases the rider benefit promises a sum same as the underlying policy assured amount, it is also called Double Indemnity Rider.
• Critical Illness Rider: Also known as Accelerated Death benefit, this rider allows an insured who is diagnosed with terminal illness and may require long term medical care or who requires confinement to medical home permanently; to withdraw part or whole amount of death benefit from the basic insurance policy. The basic insurance policy reduces by the amount withdrawn under rider. The rider helps the insured and his family meet immediate financial needs of medical treatment and loss of regular income generated by the insured. The rider generally specifies the amount available to insured in such cases and can be withdrawn by him during term of policy.
• Accidental Death, Disability or Dismemberment Rider: The accidental death rider can be sometimes extended to include any permanent or long term disability lasting atleast for 6 months or loss of limbs or sight due to accident.
• Level Term Rider: With this rider you can attach a fixed amount of term insurance to your basic permanent life insurance policy for a certain period. The amount of benefit assured can be multiple times the basic death benefit from the original policy.
• Waiver of Premium Rider: This rider helps the insured to continue with his insurance policy even if he/ she are unable to pay regular premiums due to long term or permanent disability. By default a life insurance policy can expire if the premium is not regularly paid. Incase if the insured suffers from a disability that prevents him from earning a regular source of income, the insurance policy premiums become difficult to bear. This rider allows the insured to take waiver from premium payments until the disability lasts or for the entire policy period in case of permanent disability. The terms of proving disability and its valid duration vary from company to company and across different policies.
• Guaranteed Insurability Rider: Also known as Renewal provision, this rider allows you to buy extra insurance at certain periods during the specified term of rider. Without letting your existing policy elapse, you can purchase additional insurance or convert basic term insurance without proving insurability or having to undergo fresh medical examination. The rider is most beneficial to those who may experience major medical illnesses or loss of health due to advancing age, as there is no need for fresh underwriting. It also allows to add more insurance with changing life circumstances like marriage or arrival of newborn.
• Family Income Benefit Rider: This rider provides a cushion in case of sudden death of the insured during policy term. While taking the rider, the insured needs to select the time frame for which he wants his family to continue receiving benefits. According to their comfort level, the beneficiaries will have the option of receiving regular monthly income or taking the entire benefit as lump sum after the death of the policy taker. As the insured grows old the duration of rider decreases. This rider is most beneficial to families with single bread winner.

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<h1>Types of Life Insurance Riders</h1> Author: <a href='http://www.articleseen.com/profile_Sanjay Mathew.aspx'>Sanjay Mathew</a> Insurance riders provide benefits over and above those given by a basic insurance policy. Riders are not free and come at an additional cost, but the cost is relatively less compared to that involved in taking a separate insurance policy to cover the same requirements. Some of the very essential and well known riders include accidental death rider and critical illness rider. Beside these, other important riders (their importance varies from person to person) depending upon one’s age, stage of life and future goals, include accidental death, disability or dismemberment rider, level term rider, waiver of premium rider, guaranteed insurability rider and family income benefit rider. 
•	Accidental Death Rider: The rider provides extra benefits equal to the minimum sum assured while taking the base policy. It is applicable only if the insured dies during the policy term due to accident. Since in most cases the rider benefit promises a sum same as the underlying policy assured amount, it is also called Double Indemnity Rider.
•	Critical Illness Rider: Also known as Accelerated Death benefit, this rider allows an insured who is diagnosed with terminal illness and may require long term medical care or who requires confinement to medical home permanently; to withdraw part or whole amount of death benefit from the basic insurance policy. The basic insurance policy reduces by the amount withdrawn under rider. The rider helps the insured and his family meet immediate financial needs of medical treatment and loss of regular income generated by the insured. The rider generally specifies the amount available to insured in such cases and can be withdrawn by him during term of policy.
•	Accidental Death, Disability or Dismemberment Rider: The accidental death rider can be sometimes extended to include any permanent or long term disability lasting atleast for 6 months or loss of limbs or sight due to accident. 
•	Level Term Rider: With this rider you can attach a fixed amount of term insurance to your basic permanent life insurance policy for a certain period. The amount of benefit assured can be multiple times the basic death benefit from the original policy. 
•	Waiver of Premium Rider: This rider helps the insured to continue with his insurance policy even if he/ she are unable to pay regular premiums due to long term or permanent disability. By default a life insurance policy can expire if the premium is not regularly paid. Incase if the insured suffers from a disability that prevents him from earning a regular source of income, the insurance policy premiums become difficult to bear. This rider allows the insured to take waiver from premium payments until the disability lasts or for the entire policy period in case of permanent disability. The terms of proving disability and its valid duration vary from company to company and across different policies. 
•	Guaranteed Insurability Rider: Also known as Renewal provision, this rider allows you to buy extra insurance at certain periods during the specified term of rider. Without letting your existing policy elapse, you can purchase additional insurance or convert basic term insurance without proving insurability or having to undergo fresh medical examination. The rider is most beneficial to those who may experience major medical illnesses or loss of health due to advancing age, as there is no need for fresh underwriting. It also allows to add more insurance with changing life circumstances like marriage or arrival of newborn.
•	Family Income Benefit Rider: This rider provides a cushion in case of sudden death of the insured during policy term. While taking the rider, the insured needs to select the time frame for which he wants his family to continue receiving benefits. According to their comfort level, the beneficiaries will have the option of receiving regular monthly income or taking the entire benefit as lump sum after the death of the policy taker. As the insured grows old the duration of rider decreases. This rider is most beneficial to families with single bread winner.
About the Author: We represent one of the top life insurance company India. Our product ranges from life insurance, <a rel="nofollow" href="http://www.inglife.co.in/productcenter/productcenter-retirement-goldlife.shtml">pension plan</a>, child education plans and many other financial planning products. Our online advisers and calculation tools will help you to pick the best <a rel="nofollow" href="http://www.inglife.co.in/pua/index.aspx">insurance policy</a> that meets your requirement.
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Author Resource :
We represent one of the top life insurance company India. Our product ranges from life insurance, pension plan, child education plans and many other financial planning products. Our online advisers and calculation tools will help you to pick the best insurance policy that meets your requirement.

Keywords : life insurance India, financial investment planning, ulip, pension scheme, pension plan, insurance policy, child education, l,

Category : Finance : Insurance

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