When buying insurance for yourself or your loved ones, you often have to perform some personal research. During the course of your reading there may be certain terms and concepts that are new to you.
In this article, we will examine the concept of an insurance rider. A popular misconception one might have about insurance riders is that they have something to do with vehicles, or that they are insurance policies that have something to do with vehicle passengers or drivers.
In fact, insurance riders are a completely different concept altogether. Here; we will look at what an insurance rider is and some examples of riders that will be useful for you in your daily life.
What is an Insurance Rider?
Basically, an insurance rider is an additional provision for an existing insurance policy. It is a small ‘add-on’ to an insurance that you have already bought or have decided on buying.
Apart from adding additional benefits to a policy, they are also able to amend it to fit your needs, such as to restrict or limit a certain coverage in exchange for increased coverage for other areas in a policy, for decreased premiums. They don’t usually cost much and are relatively affordable.
Source: xFrame
What Are the Benefits of Insurance Riders?
Insurance riders offer a level of flexibility for existing policies. In a sense, they’re able to offer a way for you to ‘customize’ the policy to fit your needs. Additionally, they’re also available even after you have purchased your policy and it comes into effect.
Insurance providers often come up with new riders for older policies too, in order to attract new insurance buyers. Here are some of the important benefits riders can offer:
Great for those who feel that the basic insurance policy currently available does not meet their needs adequately.
Suitable for those who already have a basic insurance policy, but feel that their circumstances have changed and now they need to amend the policy for additional coverage.
Makes it easier for policyholders who want extra coverage without the need of buying any additional or separate policies.
Increased financial savings as riders cost relatively little compared to spending on a whole new policy.
A wide variety of riders are available to add on to existing policies, which means you have more choices when it comes to customizing your current policy.
What Are Some Examples of Riders?
Waiver riders
Waiver is a rider that can be attached to our life insurance policy. It can also be attached to some traditional plans or endowment plans.
Usually, any insurance policy will lapse ( not be effective) if the policyholder fails to pay the premiums . With a waiver rider, the insurance policy will continue to be effective for a certain period of time, or for the rest of the policy term even if the holder is unable to pay due to illness or disability.
Critical Illness Rider
A critical illness rider is often a health insurance rider. For this rider, there will be a determined sum of payment to the holder for critical illnesses listed in the rider, such as heart attacks, lung cancer, stroke and kidney failure. The rider will lapse after payout is made in the case of any of the critical illnesses happening.
Source: xFrame
Accidental Dismemberment Benefit Rider
Many insurance providers provide this rider for their life insurance policies, whereby an additional payout is made if death is caused by an accident. The accidental death payout is made on top of the payout from the original life insurance policy payment.
Accident dismemberment riders will payout a lump sum amount based on your policy value in the event of loss of speech, eyesight or hearing, loss of limbs or fingers, coma or paralysis etc resulting from an accident.
The rider also includes a weekly indemnity which is applicable if the person is unable to work in their job due to an accident.
For a rider like this, you’ll have to be careful and understand the limitation and definition of the term ‘accident’. This rider is definitely more suitable for those that work in higher risk occupations and would like to provide more for their families after their passing.
Hospital Allowance Rider
Some health insurance policies will offer an additional allowance rider for your hospital stay, including things like increased allowance for wards, treatments, consultation, surgery, medical procedures and more.
These riders also provide financial allowances for periods of time when you are unable to work or conduct your business due to admission to the hospital.
Term Extension Rider
As the name suggests, you can purchase these types of riders when you want to extend the policy coverage beyond the term stated in the original policy.
Many insurance policies don’t cover you beyond a certain age, or a certain time period. Term extension riders can increase the period being covered, sometimes even for your lifetime.
Term extensions apply mostly to older policies, as all the recent policies have automatic term extensions.
Source: xFrame
Medical Card Rider
This rider includes a medical card to life policies for medical coverage.
Medical card rider benefits can come in many forms and offer all sorts of different benefits. Some medical card riders extend the Annual Limit of your card with a Life Time Unlimited usage.
Others provide added coverage amounts and limits, as well as waiver of deductibles. In fact, medical card riders can even provide a combination of these benefits to fit your needs and the various situations you may face.
Medical card riders make your medical card coverage more extensive and comprehensive, as time and circumstances change.
Lady Care Rider
This rider can be found under different names for different policy providers. However, their function is the same. They provide added coverage to a pre-existing policy for ladies.
Lady care riders provide coverage by a lump sum payout in the event of female-linked illnesses and maternal-linked conditions.
The covered events include female cancer, systemic lupus erythematosus, facial reconstructive surgery due to accident etc.
Things To Consider When Buying Riders
Buy riders in a responsible manner by considering your needs and planning for possible eventualities.
Read and understand the terms, conditions and limitations of a rider before you commit to purchasing it.
If the terms and conditions of a rider are too complex, speak with a qualified insurance agent who can explain them clearly to you.
Riders Give You The Flexibility You Need
When an insurance policy doesn’t live up to your expectations, but you feel it's the best one available, you can always ask your insurance agent about any available insurance riders.
Riders will be able to improve the suitability of the insurance policy to your specific needs and situations, especially if they have changed over the years since you’ve bought your original policy. It’s never too late to consider improving your coverage no matter how old you are!
