What are the Types of Insurance Riders available and which should you opt for?
Getting a life insurance policy not only offers you financial protection but also helps you get tax benefits. Whether you take a standalone insurance policy or choose one with life insurance riders, an insurance policy is never an expense. In fact, riders are what make your insurance policy more comprehensive and beneficial. It is also a great tax-saving investment that you can add as a part of your financial planning. Now while you might be aware of the benefits of a basic insurance policy, what about the benefits of riders? In this article, we are delving into details about insurance riders and their tax benefits.
What is a life insurance rider?
Life insurance riders are benefits that get added to your basic insurance plan so you can customize your existing life insurance policy to fit into your requirements. For example, suppose you have a health insurance plan but it doesn’t cover critical illnesses. With an insurance rider, you can customize your health insurance to support you in case of critical illnesses like cancer or heart problems. Furthermore, the addition of an insurance rider also provides tax benefits upto 1.5 lakhs
Different Types of Insurance Riders
Following are some of the prominent insurance riders that you can choose from.
- Guaranteed insurability rider
A guaranteed insurability rider allows you to increase your life insurance coverage without the need of having a medical examination. This is a type of insurance rider that comes in handy at the time of medical emergencies.
2.Accidental death insurance rider
This is a type of insurance rider that provides additional coverage to the policyholder’s family in case of accidental death. After the death of the policyholder, the amount can be claimed by the nominee. As this insurance rider comes with double benefits, it is also known as the double indemnity rider.
3.Waiver of premium rider
In the event of any unforeseen exigency like critical illness, or permanent disability, this premium rider waives off all future premiums under your policy. With the help of this rider, you can protect your policy from lapsing, in case you are incapable of making premium payments due to the loss of income.
4.Family income benefit rider
This rider is useful when the key-earner of the family dies. The income benefit rider provides steady financial support to the family.
5.Accelerated death benefit rider
This rider can be extremely helpful for policyholders suffering from critical illness or terminal illness. The accelerated death benefit rider allows you to access a certain amount of your life insurance policy’s death benefit while you are alive. With this partial amount, the family can cover their medical expenditures.
Life insurance helps you and your family financially in the event of unforeseen circumstances. Thus, choosing the right policy is important. With an insurance rider, you can make modifications to your existing life insurance policy, allowing you to enjoy benefits that the base policy doesn’t offer. Further, the freedom to customize the insurance policy provides more security and tax benefits.