Life Insurance Riders You Can Consider

In today’s world, it’s not enough to earn well and save money in the bank. You need to invest - in a better future. When life becomes so unpredictable and expensive, securing the financial future of your family becomes a priority. This is why Life Insurance is one of the best life decisions you can make.

However, different people have different financial situations and requirements - which further affect their insurance needs. And a base cover may not cater to those unique necessities. Did you know you can customise your policy, based on your requirements?

One way you can do so is by adding riders to your base plan. What are they and how do they work? Let’s find out, in this article!

What Are Riders?

Riders are additional benefits that can be added to your base life cover at a certain additional yet reasonable cost. They offer extra coverage under specific circumstances and give you all-round protection.

Types of Riders Available With a Life Insurance Plan

You can personalise your policy with the following -

01 Hospital Care Rider

If you undergo hospitalisation for treatment that is medically necessary, the Hospital Care Rider will pay a fixed amount of cash on a daily basis for each day you are hospitalised.

One of the major advantages of this rider is that the daily cash benefit amount can be modified according to your needs. The rider premium you would have to pay will depend on the daily cash benefit amount you choose.

Please note: To avail the benefit under this rider, you need to be admitted to the hospital for a minimum period of 48 hours.

ABSLI presents to you ABSLI Hospital Care Rider that comes with the above-mentioned benefits.

Example:

Mahek is diagnosed with Chronic Kidney Disease and is required to undergo hospitalisation for a period of 5 days. She has an active Hospital Care Rider along with her Whole Life Insurance plan. It specifies that the insurer will pay Mahek a sum of Rs 6,000 for each day that she is hospitalised. Hence, Mahek will receive a total sum of Rs. 30,000 over the span of 5 days.

02 Surgical Care Rider

If you are hospitalised for undergoing any medical surgery for a minimum period of 24 hours and actually undergo that surgery - you will receive a lump sum benefit.

You get an option to choose the benefit amount and the surgical care rider sum assured will be 50 times the benefit amount you select. The benefit amount can be used 50 times throughout the entire tenure of your life insurance policy and 10 times in a policy year.

The benefit amount the insurer will pay will depend on whether the surgery is classified as ‘major surgery’ or ‘other surgery’ - in the policy document. For major surgeries, like heart bypass surgery, the lump sum amount you receive will be 5 times the benefit amount. And in the case of any other surgery, you will get the benefit amount you select.

Two conditions -

• Only people aged 18 years and above can opt for this rider.
• The policy term of the rider should not exceed the policy term of your life insurance policy.

The ABSLI Surgical Care Rider is a very good option here.

Example:

Ayushi decides to buy a Surgical Care Rider along with her Endowment Plan. She opts for a benefit amount of Rs. 20,000. So, the rider sum assured will be Rs. 10 Lakhs (50 X 20,000). A few years after buying the policy, she undergoes heart surgery (major surgery). Because she is undergoing major surgery, she will get 5 times the benefit amount, i.e., Rs. 1 Lakhs (5 X 20,000) as a lump sum.

03 Waiver of Premium Rider

This rider is of 2 types -

• Waiver of Premium due to Critical Illness Rider With this in place, all your pending premiums will be waived off if you contract one of the listed critical illnesses. This rider will waive off all the future premiums of your life insurance plan as well as of the attached riders - for the rest of the policy term.
• Waiver of Premium due to Disability Rider With this in place, all your pending premiums will be waived off, in case you undergo injuries that lead to disability. This means you can avail the insurance benefits during the policy term, without having to pay future premiums.

Example:

Rishabh purchases a Term Life Insurance Policy for 55 years with a cover amount of ₹1 Crore. And he has to pay ₹65,000 as premiums, yearly. Along with it, he buys a Waiver of Premium due to Disability Rider. In the 20th policy year, he meets with an accident and both his legs get paralysed.

In this unfortunate situation, since Rishabh is permanently disabled, the insurer will waive the premiums for the remaining 35 years. His policy and its benefits, however, will remain active till the end of the policy term.

ABSLI brings to you ABSLI Waiver of Premium Rider - whose aim is to take the financial load off of you during difficult times.

04 Accidental Death Benefit Rider

This rider pays an additional sum of money to your family if you pass away due to an accident. Along with the claim amount, ABSLI will also refund the premiums paid from the date of the accident until the date of death, with interest (as declared from time to time). And, similar to other riders, the premium for this rider, too, is dependent on the rider sum assured that you choose.

Please note: The death should happen within 180 days of the accident for this rider to come into effect.

Example:

Nishant buys a Term Life Insurance plan with a cover of Rs. 75 lakhs. Along with it, he purchases an Accidental Death Benefit Rider Plus with a cover of Rs. 10 lakhs. Due to an unfortunate road accident, he passes away in the car itself. To cope with this difficult situation, his family will receive the Death Benefit of Rs. 75 lakhs and the rider benefit of Rs. 10 lakhs - i.e., Rs. 85 lakhs in total.

ABSLI offers the above-mentioned benefit in the form of ABSLI Accidental Death Benefit Rider Plus.

05 Accidental Disability Rider

An accidental disability can cause havoc to your family’s financial status. In that situation, you will not be able to earn a living for yourself and your family. Also, there will be additional expenses on medical devices and house alterations - to make it safer and more accessible to you.

This rider will provide an additional sum of money, in case you meet with an accident that leads to disability, or death.

Please note -

• This rider might only provide cover in limited cases - like in the cases of permanent and total disabilities only.
• In case of accidental disability, the amount paid to you will depend on the nature and type of disability.

The ABSLI Accidental Disability Rider is a good example here. It provides financial relief to you and your family during unfortunate times.

Example:

Ankit buys an Accidental Disability Rider along with his term insurance plan. He opts for a rider sum assured of ₹5 Lakhs. A few years after buying the policy, he meets with an accident and loses both his limbs. As per his policy schedule, he will receive 100% of the rider sum assured in such a case. So, the insurance company will pay the rider benefit of ₹5 Lakhs to Ankit.

06 Critical Illness Rider

If you get diagnosed with a serious disease or a medical condition, like - cancer, heart disease, lung disease, etc., - it could be daunting for you and your family in every sense possible. There will not only be loss of income, but also an increase in expenses. For example, medical tests and treatments, medicine costs, follow-up visits and check-ups, etc.

A Critical Illness Rider is an effective way to protect your family from the financial risk of a serious illness. It will offer a fixed sum of money in case you get diagnosed with a critical illness mentioned in the policy document - while your policy is active.

This rider is generally of two types -

• Accelerated Critical Illness Rider This will pay you an advance amount out of your total base cover. Under this rider, the benefits paid can reduce the death benefit of the base policy.
• Comprehensive Critical Illness Rider Unlike an accelerated rider, a comprehensive rider will not affect your base policy cover amount. The rider cover amount is additional to the life insurance cover amount.

Example:

Parveen and Sanya are two individuals who have been diagnosed with cancer. Both of them have purchased a Term Life Insurance policy of ₹80 lakhs. Along with it, Parveen has bought an accelerated critical illness rider with a cover of ₹20 lakhs, and Sanya has got a comprehensive critical illness rider with a cover of Rs. 20 lakhs.

Now, both of them have been advised to undergo surgical oncology and chemotherapy. In this situation, let's see how the riders they've chosen will work -

The ABSLI Critical Illness Rider provides coverage against critical illnesses.

Wrapping Up!

This was all about the riders that come with a life insurance policy, and why and when you must pick them. Be smart about the riders you choose. It’s best to add only the ones you may need. Also, there are exclusions attached to every rider, so please read rider brochures before purchasing. We hope you make a good choice today and take a step towards a better tomorrow.