Different Types of Insurance Riders Available in India

Indian workers are becoming more aware of the benefits of insurance policies. This has led to an increase in foreign, public and private investments in the Indian insurance sector. India’s insurance industry has seen a significant growth from 11 life insurance companies and 11 general insurers to 24 life insurance companies and 25 general insurance firms in 2012. Source: IRDA.

Insurance companies are offering more functional and innovative insurance policies in order to appeal to Indian customers, due to increased competition. The riders offered by companies, in addition to the regular policies are very popular in India. This is because Indians are more aware of the importance and necessity of comprehensive insurance coverage. Let’s take a look at some insurance riders offered by Indian insurance companies, keeping in mind the increasing popularity of riders.

What is a rider? Riders are an add-on benefit to your existing insurance policies that provide coverage for additional risks and, thus, offer complete protection. These riders are optional. Riders can be purchased by adding a small amount to your premium. Riders can be added to your policy and provide more protection. These riders can be a great option for those situations when the basic insurance policy is not available. You should consider adding a rider to your basic insurance plan to increase its value.

These are the most popular riders offered by Indian life insurance companies.

Accidental death benefit rider
An add-on to a life insurance policy is the accidental death benefit rider. This rider provides additional coverage in the event that the policyholder is killed in an accident. You will need to pay additional monthly premiums if you choose this rider.

If you have a life insurance policy with a Rs 30 lakh amount assured and an accidental death benefit rider worth Rs 25 lakh, your family will receive Rs 55 lakh instead of Rs 30 lakh in the event of your death.

This rider is offered by almost all Indian insurance companies. Bajaj Allianz and ING Vysya are some of these.

Critical illness rider
This add-on acts as a medical insurance policy. The critical illness rider offers huge coverage for any pre-specified condition that is listed in the policy. The critical illness coverage covers all major diseases such as cancer, heart attack and coronary bypass, kidney disease, organ transplantation, paralysis, and other serious conditions. In the event that any of these diseases or illnesses occur, the rider will pay you the guaranteed sum.

It is becoming increasingly difficult to access treatment for these terrible diseases due to the rising cost of medical services. This rider is exempted by different insurers. Before you sign this rider, make sure to read your policy documents.

Bajaj Allianz and ICICI Prudential are some of the Indian life insurance companies that offer critical illness coverage or dreaded diseases cover. Companies may also offer critical illness and accident riders.

Permanent and partial disability rider
In the event that you become permanently disabled or are temporarily incapacitated by an accident, this rider will provide a portion of your sum assured. For the next five to ten years, most policies will pay a percentage of the sum assured. This rider can only be used if you become disabled as a result of an accident. This rider can be combined with an accidental death benefit or waiver premium benefit in many insurance policies.

Many companies offer a combination of permanent or total disability rider and accident death benefit rider. ICICI Prudential and ING Vysya are some of the life insurances that offer both disability riders and accident death benefit. A combination of two riders can be more advantageous than buying a single rider.

Waiver for premium riders
In the event that you are unable to pay premiums due to income loss or disability, this rider will waive future premiums. Your original policy will still be valid. This rider exempts the insured of paying premiums until they are ready to work again. This rider also protects your policy against being cancelled. This rider is offered by Indian life insurance companies such as ICICI Prudential and Bharati AXA, among others.

According to the Indian Insurance Sector Regulator IRDA, riders should not pay more than 30% of base premium. The premiums paid by riders can be deducted from income tax under section 80C or 80D of the Income Tax Act.

Consider your age, medical history, work habits, and other factors to help you choose the right rider. You should also ensure that the price of the rider is reasonable. Compare the costs of riders from different insurance companies to find the best rider for you.