You can choose to add some extra benefits to your basic life insurance cover in your insurance policy, by paying additional premium. These additional benefits are called insurance riders. Generally the extra premium for the riders is relatively low, since the extra premium goes towards covering the risk mentioned in the rider and not to savings. It is important to note that, the riders do not change the basic life insurance plan and the nominees of the insured will get that sum assured in the event of an unfortunate death of the insured. When a claim is made for the benefits of a rider, it can result in the termination of the rider, while the original life insurance policy continues for the insured.
A wide range of insurance riders are now available in the market at competitive rates. Riders are very popular and most life insurance policies have one or more riders attached to them. But are life insurance riders beneficial for you? It depends on your personal situation and your other insurance policies. However, some riders are almost always very useful. In this article, we will discuss some useful life insurance riders.
There are several other insurance riders like Spouse Insurance, Family Income benefit, Return of Premium, Renewal Provision, Withdrawal Provision, Surgical Assistance etc. The usefulness of these will depend on your personal situation and your other insurance policies. Remember riders come at a cost. So you should ask yourself or consult with a financial adviser, if you really need the rider.
All riders (other than critical illness) get tax benefits under Section 80C of the Income Tax Act on premium contribution of up to Rs 1 lac (Rs 1.5 lac as per the new Budget). Additionally, the premium paid for the critical illness rider qualifies for deduction from taxable income under Section 80D of the Income Tax Act up to the limit of Rs 15,000 (Rs 20,000 for senior citizens). Insurance buyers should also note that premium paid for waiver of premium rider also qualifies for deduction under Section 80D.
Conclusion
In this article, we have discussed some useful life insurance riders that you can consider adding on to your life insurance policy. Riders like Permanent or Partial disability and Accidental Death are useful at almost any age. Whereas critical illness, waiver of premium and guaranteed insurability riders are more useful as the insured approaches middle age. Read the policy document of the company for exact wordings. Due to competition in the Indian insurance industry, the life insurance companies are offering various products at very competitive rates. You should always compare plans of different companies before buying your life insurance policy.
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