Life insurance is a financial agreement between an insurance provider and a policyholder in which the insurance provider guarantees payment of a death benefit to named beneficiaries upon the policyholder’s death. In India, riders are additional benefits that can be added to a life insurance policy to provide additional coverage and protection.
Insurance riders provide additional financial assistance during the policy tenure in the event of a specific occurrence, such as the policyholder getting affected due to a critical illness, disability, etc., It helps in managing the financial inconsistency, and the benefits are over and above the life cover.
Here is a detail about the significance of add-on riders in life insurance in India.
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Life insurance riders extend a range of benefits that insist on their significance on a standard life insurance plan.
Riders can provide increased financial assistance to policyholders and their beneficiaries in case of an unexpected event during the policy tenure.
For example, it can help the family manage the financial imbalances considering the routine expenses, debts, etc., when the policyholder is affected due to an illness, injury, or disability.
Therefore, financial support can be used to manage the current crisis while ensuring the death benefit in the event of an unexpected death.
Riders are an important aspect of life insurance in India as they provide additional protection and coverage for policyholders and their beneficiaries. Moreover, they can be customized to meet the specific needs and requirements of the policyholder, making the policy more comprehensive and tailored to their individual needs.
For example, Tata AIA Life Insurance provides the riders with varied payout options, such as receiving the benefit as a lump sum, regular income stream, or as a combination of both options. Therefore, if the policyholder has purchased whole life insurance and the rider for critical illnesses with a regular income payout, the policyholder will receive a regular income for the defined period to manage the medical expenses if they are affected due to a critical illness such as cancer at any time of his life.
Riders can be affordable for policyholders to increase their coverage and protection. In addition, they can be added to a life insurance policy for an additional cost, providing coverage benefits without the need to purchase a separate policy.
The premium paid towards life insurance riders also qualifies for tax benefits under Section 80C of the Income Tax Act. Additionally, policyholders can claim tax benefits on the premium paid towards certain health riders under Section 80D Act.
Some of the common insurance rider options available with life insurance policies in India are:
Life insurance riders can be an appropriate option for many individuals, but they are particularly useful for those with a high probability of specific occurrences that can affect their health.
Riders are benefits that can be added to life insurance policies to provide additional coverage and protection. In addition, they can be customized to meet the specific needs of policyholders, making the policy more comprehensive and tailored to their individual needs. They are particularly useful for people with a high risk of accidents, having a family medical history of a critical illness or in a high-risk occupation.
Originally posted 2023-02-13 21:51:24.
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