If you’re a global NRI who’s living or working abroad, considering life insurance riders is very important. These not only bolster your life insurance plan but also help you secure yourself and your family against various unforeseen situations.
What are Life Insurance Riders?
Life insurance riders are add-ons or benefits that are applied to base insurance policies. These enhance the scope of coverage while addressing the unique needs of policyholders. Each rider comes with an added cost for the policyholder, while ensuring coverage against scenarios like accidents, disability, critical illnesses, and more.
Benefits of Adding Life Insurance Riders
Some of the major benefits of life insurance riders include the following:
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Higher financial protection – A base life insurance plan only pays the sum assured or death benefit upon the policyholder’s demise within the policy period. Riders enable payouts or premium waivers, among other benefits, in diverse challenging circumstances.
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Personalised coverage – You can comfortably personalise your policy to fit your needs, depending on your profession, health records, lifestyle, etc. For instance, a person with a family history of heart disease may select a critical illness rider. Another individual with a risky occupation may choose an accidental death/disability rider.
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Affordability – You don’t have to buy a separate policy to insure yourself and your family against various scenarios that are not covered in your base policy. Riders usually come with a nominal extra cost.
Key Factors to Consider Before Adding Riders
Here are some aspects worth considering before adding riders to your life insurance policy.
- Premium amounts and whether you can afford them.
- Scope of coverage.
- Tax benefits/deductions.
- Exclusions or inclusions.
- Waiting and survival periods, if any.
- Non-transferable nature of riders (you cannot transfer them from the base policy to another insurer).
Common Types of Life Insurance Riders
The following are options people usually pick in their life insurance:
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Accidental Death Benefit – The ADB rider provides financial protection to nominees in the event of the policyholder's accidental death.
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Accidental Total & Permanent Disability Rider — These riders safeguard the family by providing a lump-sum payout in the event of permanent or temporary disability resulting from an accident. However, there are waiting periods (usually 180 days) for these riders.
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Waiver of Premium – The rider waives premiums in the event of certain events, such as critical illnesses or disabilities. This ensures that the coverage remains intact at all times.
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Income Benefit – These riders provide regular income to the families of policyholders for a specified period after the policyholder's death.
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Accelerated Death Benefit – This helps you get a part of the death benefit in advance, in case you are diagnosed with any terminal illness.
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Hospital Cash – These riders offer a daily cash allowance (fixed) for each day of hospitalisation.
Critical Illness Rider in Life Insurance
The critical illness rider in life insurance is a vital add-on for any life insurance policy. It provides coverage for specific ailments. These may include cancer, heart attacks, kidney failures, paralysis, etc. The policyholder will receive a lump-sum payout upon diagnosis of the illness, regardless of treatment costs. This can be used to cover treatments, recovery, loss of income, etc.
How to Choose the Right Life Insurance Riders?
Here are some ways to choose the right life insurance riders:
- Work out your financial circumstances and whether you can manage to pay the premiums.
- Compare the premiums and terms across multiple insurers.
- Determine the riders you need, based on your occupation, age, lifestyle, family and personal medical history, etc.
- Consider the needs of your dependents. A waiver of premium rider, for example, can be useful if the whole family depends on your income.
Choosing the right life insurer is very important if you want global coverage without any hassles. You can consider HDFC Life International for its line-up of international. These come with flexible riders and add-on choices, along with enabling seamless cross-border coverage, a vast network of hospitals worldwide, and multiple other benefits. They also help you combat rising inflation while combating exchange rate fluctuations simultaneously. You can customise your riders and policies based on your specific needs, with tailored guidance from HDFC Life International.
