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How Life Insurance Riders offer comprehensive coverage
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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
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Life Insurance riders are the add-ons for your policy that expand the coverage of your base policy. These come at an additional cost and bring valuable financial advantages. They are effective additions that you can choose along with your policy that will make your policy robust, covering all your needs.
There are many different kinds of Insurance riders. Let us explore the benefits these riders provide
Comprehensive Coverage with Life Insurance Riders
Here is how Life Insurance riders can enhance your policy.
1. Extra Cover
Having a rider added to your sum assured will enhance your policy coverage by providing additional protection against unforeseen emergencies. Manage your financial needs during major injuries and illnesses, treatments, accidental disability, hospitalisation, and more with additional riders.
2. Flexible Options
Each rider covers a range of different situations and emergencies where you may need financial assistance. This way, you can choose the one that fits your needs. At the same time, you have the option of picking more than one rider to ensure that you and your family are covered against any type of emergency.
3. Affordable Premium
Enhance your base Life Insurance policy by adding riders with affordable premiums. Choose the riders you want to avoid paying high premiums in the future. By doing so, you can achieve the coverage you desire without having to overspend on premium payments.
4. Tax Benefits
While adding extra riders will increase your premium payment, you can benefit from tax deductions on the rider premium payment. Health riders, such as hospitalisation or critical illness riders, are eligible for tax deductions under Section 80D, while other riders are eligible under Section 80C of the Income Tax Act. You can receive tax benefits based on the rider chosen, as outlined in your policy terms and conditions. It is important to note that not all riders qualify for tax benefits, and deductions are subject to policy terms.
5. Additional Protection
Sometimes, the sum assured for a Life Insurance policy may not be sufficient in the event of an unforeseen emergency. Instead of taking out a loan or borrowing money, you can consider adding one or more riders to your policy when you initially invest. This will provide additional protection for you and your loved ones in case of a loss of income or financial difficulties during difficult times.
Now that you know how a rider can significantly impact your investment plan in a Life Insurance policy, you can understand the various types of riders available.
1. Accidental Death
The accidental death benefit rider provides financial coverage in the event of the insured's sudden death by accident. Under this rider, the policy's full amount will be paid out to the insured's family in a lump sum if the policyholder dies as a result of an accident.
2. Critical Illness
The critical illness rider covers a wide range of conditions to protect individuals from financial obligations. If you are diagnosed with a critical illness, you and your family will receive a lump sum amount to help cover medical expenses related to the illness.
3. Permanent Disability Rider
If you become permanently disabled as a result of an accident, this rider can offer financial assistance. By including it in your standard Insurance policy, you may receive consistent payments from the Insurance provider for a specific duration. You also have the choice to pair this coverage with an accidental death benefit rider, guaranteeing you will have a source of income in the event that you are unable to work due to an accident.
4. Income Benefit Rider
This rider is particularly advantageous if you are the main breadwinner in your family. If something unfortunate occurs during the policy term, your beneficiaries will receive additional income for a specified period. This payout is in addition to the standard Life cover benefits provided in your basic Insurance plan.
5. Waiver of Premium Rider
If you are unable to pay your premiums due to accidental disability or loss of income, the insurer will waive future payments. This means your coverage will remain active, and you will continue to receive all the benefits of your policy. Without this rider, missing a premium payment could result in losing all the benefits of your Insurance plan.
Summing Up
Having a Life Insurance rider can greatly enhance the coverage of your policy. While it is ideal to have an Insurance policy that meets all of your needs, if you find that your coverage is lacking, you can always add a rider to supplement it.
FAQs
Q1. What does an Insurance rider cover?
Different types of Insurance riders prioritise specific features. They cover what your policy may not cover. Whether it is a critical illness or a disease, the rider completes your policy and makes it ideal for your situation.
Q2. What is included in a rider?
An Insurance rider, also known as an add-on or endorsement, is an additional benefit or provision that can be added to an existing Insurance policy to enhance its coverage. Riders offer expanded protection beyond the basic policy terms, often at an additional cost.
Q3. How to pick the right Life Insurance rider?
Choose the appropriate Life Insurance rider by determining what specific coverage you require. Assess whether the rider is within your budget or not. If it is too expensive, consider finding a rider that meets your needs while also being affordable.
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