Life Insurance 505 views August 6, 2021

Life insurance riders enhance your protection against uncertainties in exchange for the extra premium that you need to pay to the insurer. Yes, riders come as a supplement to the base life insurance plan. So, the insurance company charges a premium for both the base plan and the rider that you choose. Besides extra premium payment, riders come with some other conditions too. The terms and conditions will also differ based on the rider you choose. We’ll thus discuss here the riders available under term insurance and the conditions they come with. So, let’s read, understand and choose the right rider alternative for us.

Term Insurance

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Riders Available Under Term Insurance Plans

Life insurance companies offer you a wide range of riders on your base plan. These include critical illness rider, accidental death benefit rider, accidental disability rider, premium waiver rider, etc. Let’s learn about these riders and their terms and conditions below.

Critical Illness Rider

Critical illnesses such as heart attack and cancer not only affect you physically but also financially if you are not prepared for the same. One requires frequent medical attention and expensive surgeries to recover from such illnesses. The treatment costs can range from INR 3-5 lakh to even a crore depending on the severity of the illness. But if you choose this rider, you will get a lump sum amount upon the diagnosis of any of the following critical illnesses –

  1. First heart attack of specified severity
  2. Cancer of specified severity
  3. Benign brain tumour
  4. End Stage Liver Disease
  5. End Stage Lung Disease
  6. Kidney failure wherein constant dialysis is required
  7. Open heart replacement or repair of heart valves
  8. Major Burns
  9. Major Head Trauma
  10. Permanently paralyzed limbs
  11. Transplantation of major organs/bone marrow
  12. Stroke leading to permanent symptoms
  13. Surgery of Aorta
  14. Open Chest CABG
  15. Coma of specified severity
  16. And some more

Conditions to Meet to Get the Benefit of Critical Illness Rider

To get the benefit of a critical illness rider, you need to meet the following conditions –

  1. A waiting period of 90 days applies from the date of risk commencement.
  2. The waiting period norms can apply to the revival of a lapsed critical illness rider too. However, the norms can vary from one insurer. If we consider HDFC Critical Illness Plus Rider, the remaining day of the waiting period will be in force in case you revive it within 60 days of lapse. In case you do after 60 days, the total 90-day waiting period will apply fresh.
  3. You need to survive for a few days from the date of diagnosis (as specified in the rider document) to receive the payout. This is called the survival period and can vary from one insurer to another. For instance, HDFC Critical Illness Plus Rider comes with a survival period of 30 days from the date of diagnosis.

Note – The waiting period is the time up to which you need to wait for the cover to begin.

Accidental Death Benefit Rider

Even base life insurance plans cover accidental death. Then, why should one attach an accidental death benefit rider to the base plan? Well, doing so will ensure double the sum assured to your nominee in case you die due to an accident. But the rider comes with certain terms and conditions you need to meet. At the same time, you won’t get the benefit of this rider under some circumstances that you could read here. Let’s talk about them below.

Terms and Conditions Associated with Accidental Death Benefit Rider

Firstly, insurers have defined accidental death as something caused due to a bodily injury from an accident. The rider will come into play only if the death happens within 180 days of the bodily injury before the cover expiry. Terms and conditions also include the exclusions one needs to contend with. Insurance companies don’t pay in case of accidental death due to the following circumstances –

  1. Injuries suffered deliberately or while attempting suicide
  2. In case the insured remains under the influence of alcohol, drugs, narcotics or psychotropic substances unless consumed as per the lawful directions and under the advice of a medical practitioner
  3. Not seeking or following the medical advice
  4. Injuries while participating in a flying activity, except as a bonafide, fare-paying passenger of a well-known airline or regular routes and on a scheduled timetable.
  5. Injuries resulting from participation in a criminal or unlawful act
  6. Injuries while being in any military, naval, police, air force or similar services
  7. Injuries related to war, invasion, an act of a foreign enemy, hostilities, armed or unarmed truce, rebellion, mutiny, revolution, terrorist act, insurrection, military or usurped power

Accidental Disability Rider

If the accident causes disability to the insured, the insurer will pay a certain percentage of the rider sum assured for a specific period, helping him/her deal with the possible lack of income situation due to such an incident. Sounds interesting, but like all other riders, it also comes with certain terms and conditions for you to meet.

Conditions Applicable to Accident Disability Rider

Below are the conditions that would apply to the accident disability rider.

  1. If the disability is due to any pre-existing condition
  2. In case the disability is partly or wholly, directly or indirectly due to an Acquired ImmunoDeficiency Syndrome (AIDS) or infection caused by any Human Immunodeficiency Virus (HIV)
  3. If you are disabled while participating in any hazardous sport or pastimes
  4. Injuries suffered deliberately or while committing suicide regardless of your sanity at such times
  5. If the disability happens under the influence/abuse of drugs, narcotics, alcohol or psychotropic substance not prescribed by a medical practitioner
  6. In case the insured suffers from a disability while participating in a riot, industrial dispute, strike, etc.
  7. If the insured becomes disabled owing to involvement in criminal or illegal activity.

Premium Waiver Rider

As the name suggests, the premium shall get waived off. This rider comes into play when one gets injured in an accident or diagnosed with a critical illness and is unlikely to earn and take care of his/her family. With such a rider in place, the policy remains active even if you can’t pay the premium. The rider comes with some conditions that you could check below.

  1. A waiting period of 90 days applies from the date of commencement of the rider plan.
  2. The rider once added can’t be removed later
  3. The premium for this rider will be waived upon the incidents mentioned above. However, the premium for other riders, if you opt for the same, will continue

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