Rider Plans: The Overlooked Add-Ons That Can Make or Break Your Life Insurance Strategy

A life insurance policy is a financial safety net that protects your loved ones during a crisis. Losing someone they love can be hard enough without having to bear the financial burden of a household and all the liabilities and debts. A life insurance pay out can help them navigate tough financial challenges.

Basic life insurance plans pay the sum assured to the beneficiaries in the event of your death. But what about the financial liabilities associated with a death from a critical illness, accident or even a disability? The costs can be astronomical and the simple death benefit pay out may not be enough to help your loved ones recover financially.

That is why rider plans are important additions to life insurance policies.

What are rider plans?

Riders are additional financial protection plans that you can add to your life insurance policies. These are benefits that you can obtain if specific criteria listed by the rider plans apply to you. Rider plans elevate the value of life insurance plans.

There are a number of rider plans that you can include in your life insurance policy, which are as follows:

1. Family Protect Rider Plans – These are add-ons to your life insurance policy that help the family cope with financial stress by offering regular income in the event of your demise.
2. Accidental Disability Benefit – If you run into an accident that causes temporary, partial, total, or permanent disability, then these rider plans can help cope with the expenses. In the event of your unfortunate demise, the insurance plan coupled with the rider plans will help escalate the pay-out.
3. Accidental Death Benefit – If your demise is a result of an accident, having these rider plans added to your life insurance policy can be very helpful. The sum assured is paid as death benefit along with the sum insured associated with the Accidental Death Benefit riders.
4. Linked Accident Protection Riders –  These are rider plans associated with ULIPs wherein if your demise is a result of an accident or you suffer permanent disability, then the plan pays a higher death benefit.
5. Critical Illness Riders – These are rider plans that help pay for the costs associated with the treatment of a critical illness for the policyholder.

You will need to opt for the riders beforehand, and if you face an accident-related injury, disability or death, or are diagnosed with critical illnesses, the coverage from the rider plans can help pay for the costs of treatment and other related circumstances as per the terms and conditions applicable.

What is term insurance with critical illness rider?

A term insurance plan is a life insurance policy that is available for very affordable premium rates for shorter durations. You can add critical illness riders to elevate the value of your term insurance policy in the event of your demise.

Term insurance with critical illness riders basically helps cover the expenses associated with the treatments of a critical illness. You will need to acquire the rider plans with your basic term insurance policy. If you are diagnosed with a critical illness and need treatments, then you can file a claim.

The insurance provider will pay a lump sum amount to help cover the costs of treatment. You can use the amount to pay for surgeries, diagnostics, medicines, and post-hospitalisation care. If the critical illness results in the demise of the insured, then the beneficiaries are entitled to a higher death benefit accounting to terms and conditions associated with term insurance with critical illness rider.

What are the features of term insurance with critical illness rider

There are several benefits of term insurance with critical illness rider but your claim must comply with the terms and conditions of the policy. The general features of term insurance with critical illness rider are as follows:

1. The critical illness for which you can file claims must be listed as an inclusion of term insurance with critical illness riders.
2. You need to purchase the term insurance with critical illness riders before you are diagnosed.
3. You must sustain the survival period after being diagnosed to receive the benefits of term insurance with critical illness riders. In case of emergency critical illnesses such as heart attacks, you may receive the pay out immediately.
4. The insurance provider will issue a lump sum pay out to tackle the costs of treatment.
5. The total coverage for the critical illness must not exceed the sum assured for the basic term insurance policy.

The benefits of term insurance with critical illness riders will be paid after you file a claim following the survival period of your policy.

Conclusion

Rider plans help compensate for costs associated with various illnesses, disabilities, and other circumstances that may drain your finances. While term insurance with critical illness riders can be very helpful in paying the high costs of treatment, accidental covers can assist with financial planning when an accident causes permanent or temporary financial stress. You can choose rider plans that would benefit you the most and add them to your basic life insurance policies.