Different Types of Insurance Riders Available in India

Awareness on benefits of insurance policies is growing rapidly among the employed individuals in India. This is leading to increased participation of more public, private and foreign investments in insurance sector in India. The insurance company in India has grown from 11 life and 11 general insurers in 2001 to 24 life and 25 general insurance companies in 2012 (Source: IRDA).

Due to this increased competition in Indian market, insurance companies are coming up with new and more functional insurance policies to attract customers. Not only the regular policies, but also the riders that are being offered by the companies are in great demand in India as people are now greatly aware of the importance of having a comprehensive insurance coverage. Keeping in view this increased popularity of riders, let us look at a few insurance riders that are being offered by various insurance companies in India.

What are riders?
Riders are add-on benefits to your existing insurance policies, that offer coverage for additional risks and thus, give you complete protection. They are optional. You can buy riders by paying some additional amount to your original premium. Riders help in giving more comprehensive protection and enhance the scope of your insurance policy. These add-ons may help you in difficult situations where the basic insurance policy may not come into play. So, in order to add value to your basic protection plan, you need to consider taking a rider.

Following are the most common riders offered by life insurance companies in India.

Accidental death benefit rider

Accidental death benefit rider is an add-on available with a life insurance policy. It provides an additional sum assured if the policy holder dies due to an accident. On opting for this rider, you need to pay extra monthly premiums along with your regular life insurance premiums.

For instance, if you take a life insurance policy of Rs 30 lakh sum assured along with accidental death benefit rider of Rs 25 lakh, your family will get Rs 55 lakh, instead of just Rs 30 lakh in case of your death in an accident.

Almost all the insurance companies present in India offer this rider. Some of them are Bajaj Allianz, ING Vysya, SBI Life, Kotak Mahindra, Met Life, LIC, AVIVA.

Critical illness rider
This rider acts as an add-on for medical insurance policy. Critical illness rider provides huge coverage upon diagnosis of any pre-specified illness that is mentioned in the policy. Basically, all the major illnesses like cancer, heart attack, coronary artery bypass, kidney failure, organ transplant, paralysis are included in the critical illness cover. It pays you the assured sum in the event of occurrence of any one of these illnesses or diseases covered under the rider.

The growing cost of medical services makes it difficult to get treatment for such dreadful diseases. Different insurers have different types of exclusions for this rider. So, better read the policy documents before taking this rider.

Some life insurance companies in India that offer critical illness cover or dreaded disease cover are Bajaj Allianz, ICICI Prudential, ING Vysya, SBI life, Kotak Mahindra, Met Life, Reliance life, Sahara Life, AVIVA, Future Generali. Some companies also combine accident and critical illness riders together.

Partial and permanent disability rider
This rider provides a portion of sum assured in case you are disabled permanently or temporarily due to an accident. Most policies pay a certain percentage of sum assured periodically for next 5-10 years. However, this rider is helpful only if you are disabled due to an accident. In many insurance policies, this rider is combined with accidental death benefit or waiver of premium benefit.

Many companies combine permanent or total disability rider with accident death benefit rider and offer them as a single rider. Some of the life insurers offering accident death benefit and disability riders together are ICICI Prudential, ING Vysya, SBI Life, Kotak Mahindra, reliance, Star Union Dai-ichi. Buying a rider that has a combination of two riders is more beneficial compared to buying single rider.

Waiver of premium rider
This rider waives off future premiums in case you are not able to pay the premiums due to disability or income loss. But your original policy will be still in force. It exempts the insured from paying premiums until the insured is ready to work again. Also, this rider protects your policy from getting expired. This rider is being offered by Indian life insurance companies like ICICI Prudential, Bharati AXA and many more.

As per the Indian insurance sector regulator IRDA, the premiums for all riders together should not exceed 30% of the premium on the base policy. Moreover, the premium paid for the riders are eligible for tax deductions under section 80C and 80D of Income Tax Act.

Thus, you need to identify the rider that suits you by considering the factors like age, history of illness, regular mode of working, etc. Also, make sure the cost of the rider is affordable. Compare the cost of riders from different insurance companies and get a beneficial rider that suits your need.

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