If you are a customer and you have a life insurance policy or are considering to buy a Life Insurance Policy in the future, then you must know about the Riders. You will also agree that life is precious and no one knows what is hidden in the womb of a person's future. In such a situation, Life Insurance becomes an important means to stay financially safe from future uncertainties.
When you buy a Normal Life Insurance Policy, such policies provide financial security to your family in case of death. But consider a person who has met with an accident and has become permanently disabled forever. The question is, will such a person be in a position to earn? A Normal Life Insurance Policy will provide financial help on his death, so what will happen to that person and his family now?
Imagine another scenario, after buying a Normal Life Insurance Policy, a few years later the policyholder gets afflicted with a serious illness or a person buys a Life Insurance Policy for his Minor Child and after some time of buying the policy that person dies. In such a situation, is there any solution for future financial problems?
I believe that a large section of the Indian society is not capable of buying different types of insurance policies to meet their different needs. That is, I want to say that if a person buys a Life Insurance Policy to give financial security to the family from death, then it is possible that he may not have the capacity to buy health insurance and other types of insurance.
To give different types of financial security to such people, almost all Life Insurance Companies provide the benefit of Riders. When you buy a life insurance policy, you have to deposit a very small additional premium along with the premium of your Life Insurance Policy and by doing so, you get the benefit of different types of Insurance Protection.
So friends, in this article of Jeevan Bima Bazaar we will know in detail about LIC's rider. So let's move forward to get this very useful information.
What is a Rider
No one knows what is hidden in the womb of the future. In such a situation, if you earn and the financial needs of other members of your family depend on your earnings, then a big problem and concern in front of you is that if you die in the future, how will the financial needs of your family be met?
This problem of yours can be solved by Life Insurance Policies. But if you buy any Life Insurance Policy, then that policy will provide financial assistance to your family in case of your death or will pay maturity on completion of the policy.
In such a situation, I feel that the responsibility of your Life Insurance Policy should not be limited only to Death Benefits or benefits received on maturity. Because, Human Life is also affected by many other types of risks. For example - death or disability due to accident, serious diseases etc.
To provide financial security from such additional risks, Life Insurance Corporation of India (LIC) provides the facility of rider.
Meaning of Rider
Rider is an Optional Benefit that can be availed with many policies of LIC. If a person avails this rider along with his Life Insurance Policy, then he can get the benefit of related Insurance Protection in various situations like Death or Permanent Disability due to Accident, Critical Illnesses, etc. To avail the benefit of the rider, the policyholder has to pay some nominal additional premium along with the premium of his Basic Life Insurance Policy.
Example: LIC provides the option of Accidental Death Benefit Rider in many of its policies. Now suppose a person buys a Life Insurance Policy of ₹ 10 lakh from LIC, then that person can also avail the benefit of Accidental Death Benefit Rider up to a maximum of ₹ 10 lakh by paying a small nominal additional premium.
Now the benefit of this rider is that if this person dies due to an accident, then his nominee gets an additional payment of ₹ 10 lakh of this rider along with the death claim of the Basic Insurance Amount.
Difference Between Rider and Basic Life Insurance
| Points | Basic Life Insurance | Rider |
|---|---|---|
| Objective | The main objective of basic Life Insurance Policies is to provide Financial Security to the family in case of Death of the Policyholder. | While the main objective of the rider is to protect the Financial Loss caused due to other adverse circumstances other than death. |
| Freedom | Any Basic Life Insurance can be purchased independently. | While the rider cannot be purchased independently. The rider can always be taken with some Basic Life Insurance Policy. |
| Maturity Benefit | Generally, the benefit of maturity can be availed in the Basic Life Insurance Policy. | While in any situation, no Maturity Benefit is availed for the Rider. |
| Premium | The premium of Basic Life Insurance Policies is relatively very high | While the premium of riders is very low |
| Coverage | Basic Life Insurance Policies cover the Risk of Death. | While the Rider covers special circumstances. For example- Accidental Death, Disability, Critical Illness etc. |
| Termination | It lasts for the full term of the policy | While sometimes the rider can be for different periods. |
Benefits of Rider
- Additional Protection: The biggest benefit of choosing a rider is that Financial Protection can be taken for other types of Risks apart from the risk of death. Such as- Accidental Death, Disability, Critical Illness etc.
- Economical: The policyholder has to pay very little to get Financial Protection from many types of risks through the rider, while the risk protection increases significantly.
- Flexibility: Almost all types of riders are optional, that is, you can take or leave the benefit of the respective rider as per your need and wish.
- Tax Benefits: All payments due to the rider are tax free.
- Comprehensive Coverage: With the help of riders, basic life insurance plans can be made into a complete financial security cover. Due to which many types of risks of life can be easily faced.
Types of Riders
Apart from death, many other unforeseen events occur in Human Life due to which a person's own life and the life of his family are suddenly surrounded by Financial Problems. To deal with these problems, Life Insurance Corporation of India (LIC) offers many types of Riders with its traditional Life Insurance Policies.
Any policyholder can choose one or more Riders as per the rules of the basic policy keeping in mind his needs. Each of these riders covers a particular risk and provides the benefit of additional insurance protection in a certain situation. Let us now understand how many types of riders are there:
Types of Riders in LIC
Life Insurance Corporation of India offers a total of five types of riders keeping in mind the needs of its policyholders, which are as follows
- LIC's Accidental Benefit Rider
- LIC's Accidental Death and Disability Benefit Rider
- LIC's Premium Waiver Benefit Rider
- LIC's New Term Assurance Rider
- LIC's Linked Accidental Death Benefit Rider
Brief Introduction of Each Rider of LIC
Let us now get brief information about all these riders of LIC.
LIC Accidental Benefit Rider
This rider is also called ADBR in short. It has been seen many times that when a person gets into an accident and dies after some time, in such a situation, the family of that person spends a lot of money in the treatment of that member to save his life and despite this, they are not able to save the life of that person. Many families have to take loans to deal with such difficult situations.
This rider proves to be very helpful in getting Financial Security from such uncertain events. If a person dies due to an accident, then due to this rider, his nominee gets additional amount in addition to the benefits received from the Basic Insurance Policy, with the help of which the nominee gets a lot of help in facing the above possible problems.
LIC's Accidental Death and Disability Benefit Rider
This rider is also called ADDBR in short. Many times it has also been seen that in many accidents, the injured person dies, and many times the person does not die but he becomes permanently disabled. As a result of which he loses the ability to earn income by doing any kind of employment.
LIC's Accidental Death and Disability Benefit Rider is such a rider that provides Financial Security to the person in both these situations. That is, if a person dies due to an accident or a person becomes completely disabled due to an accident, then this rider provides financial security to such a person.
LIC's Premium Waiver Benefit Rider
This rider proves to be more useful when a Life Insurance Policy is bought for a minor. The premium of a minor's life policy is often deposited by his parents. The problem in such policies arises when the parents die, that is, the person who deposited the premium dies.
If this rider is also taken along with the policy bought for a minor's life, then its benefit is that if the person who deposited the policy premium dies, then all the future premiums of the minor's policy are waived off.
LIC's New Term Assurance Rider
This rider provides additional protection against the death of the policyholder. This means that if a policyholder wants that if he dies due to any reason (normal or accidental death), his nominee should get Financial Security in addition to the benefits of the Basic Life Insurance Policy, then this rider proves to be suitable for such policyholders.
LIC's Linked Accidental Death Benefit Rider
This rider works like LIC's Accidental Death Benefit Rider but this rider is specially designed for Unit Linked Life Insurance Policies.
How to Choose a Rider
If you are considering buying a Life Insurance Policy, then it is better to choose the right rider at the time of buying the policy itself. Although many riders can be taken even after the policy is issued. But you must keep these things in mind while choosing a rider.
- Personal Requirements: If you want to choose a rider, then first of all you should seriously assess your age, health condition, lifestyle and life risks and after that choose the right rider.
- Policy Compatibility: Keep in mind that not all the riders mentioned above are available with all types of life insurance policies, so first you should choose the right basic life insurance policy and then find out which riders are available with that basic insurance policy. Then choose the right rider only after fully understanding all the riders.
- Ability to Afford Premiums: Although the premium amount for all riders is nominal, you must keep in mind that there is no maturity payout in lieu of this payment. The benefit of the rider accrues only when the relevant event occurs. So, you should choose the rider only if you are able to pay the additional premium and are able to bear the loss in case you do not get any benefit till maturity.
- Future Protection: Choose the rider keeping in mind your long-term risk protection needs
Contact a Life Insurance Expert
Through this article on Jeevan Bima Bazaar, I have tried to explain the complete information in detail in the simplest way. But still it is possible that you may have many questions related to this topic. I want to tell you that to get detailed information about Life Insurance Policy or its Riders, you should contact a Professional Life Insurance Expert only.
Keeping in mind your convenience, I am sharing a link button below. Here you have been given information about Life Insurance Agents (who are experts in this subject) from different areas of the whole of India. Contact the nearest expert in your area today for the right decision.
Conclusion
Human Life is full of uncertainties. We do not know which moment of the future will force us to face what kind of situation. In such a situation, by choosing Life Insurance Plans and the right Riders with them, you can give a strong security cover to the Financial Future of yourself and your family, which will give you and your family the financial strength to face adverse circumstances.
Remember, the future is secure only for those who take the right decisions at the right time. Death, accidents and diseases are not in our control, but we can definitely prepare ourselves to fight any such situation.
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