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What are Riders in Insurance?

What are Riders in Insurance?

Q: Q. What Are the Tax Benefits of Riders In Insurance?

A. At present, the tax benefits on riders in insurance are similar to the basic life insurance plans. You are eligible for tax deductions on rider premiums under Section 80C and Section 80D.

Q: Q. Can I Have a Rider in Insurance Without A Base Policy?

A. No, riders in insurance are only applicable as an add-on to an existing policy. They cannot be purchased separately.

Q: Q. Can I opt Out of a Rider Added To My Policy?

A. Depending on the terms of the riders in insurance with your insurance provider, it is possible to opt-out of the rider coverage.

Q: Q. When Can I Buy Riders in Insurance?

A. Typically, insurance providers offer riders in insurance at the time of purchase of the insurance policy. However, some insurers may allow adding a rider later while the base policy is in force, as well.

Q: Q. How Many Riders Can I add to A Policy?

A. It is mandatory that the riders in insurance are offered under a base insurance policy. The limit on the premium and sum assured of the rider depends upon the terms and conditions of the base policy and may differ from one company to another.

An insurance plan provides financial assistance to the policyholder and their loved ones. It is important for you to invest in appropriate insurance plans to protect your life and valuables. As you go on with your life, the financial condition and requirements from an insurance plan may change as we

Disclaimer: In Unit Linked Policies, the investment Risk in the investment portfolio is borne by the policyholder.

^*Disclaimer :

Axis Max Life Smart Secure Plus Plan. A non-linked non-participating individual pure risk premium life insurance plan| The premium calculated as per Standard premium for 30 year old healthy male, non-smoker, 40 years policy term, 40 years premium payment term (exclusive of GST) for Axis Max Life Smart Secure Plus Plan and is rounded off from Rs. 3,27,782. ^~1Condition for special exit value: Option to receive all premiums paid back at the age of 55 years and the life cover also gets terminated. Total premiums paid towards the policy (excl. GST) will be the Special Exit Value payable at the age of 55 years in case the policy holder wishes to completely exit the policy. Benefit available with special exit value -Total premium paid inclusive of any extra premium but exclusive of all applicable taxes, cesses or levies & modal extra. The total premiums paid plus underwriting extra premiums paid plus loadings for modal premiums exclusive of all applicable taxes, cesses or levies. This value shall be applicable on the base cover premium only and not to additional optional benefits like ACI, Accident cover, Joint life cover and Voluntary Sum Assured Top-Up.

Written by

Alok Mishra

Insurance Writer

Alok Mishra is a Digital and Content Marketing specialist with 10 years of experience. He has spearheaded Web Content, Social Media & Branding, and Community Building initiatives to drive growth for prominent brands.

Reviewed by

Bhaskar Sinha

Insurance Expert

8+ years of experience in Life Insurance with expertise in Developing Life and Health Products, Digital Sales, Conducting effective trainings and Key Account Management.

What is a Rider?

Riders in insurance are additional provisions that help add benefits to an existing plan. It allows policyholders to expand the coverage of their insurance plan at affordable rates. There may be particular needs that are not covered by a standard insurance policy, which is why many people are willing to understand what is rider.

Riders in insurance allow the policy buyer to customize their plan according to their requirements. It helps ensure a more comprehensive cover just by paying an additional, generally inexpensive premium.

You might think that rider meaning in insurance only refers to an additional security layer, which is not applicable in your case. While you may be right, it is essential to remember that insurance plans' primary purpose is to prepare you against unforeseen circumstances.

As we all know, we do not have much control over the future. Riders in insurance offer a chance to cover all your bases and strengthen your security shield.

Types of Life Insurance Riders

Next to knowing what is a rider in insurance comes its various types. There are many types of riders in insurance that are available for varying needs. Let's look at various types of life insurance riders.

1. Critical Illness Rider

Critical illness riders in insurance offer the additional benefit of coverage if the policyholder is diagnosed with a life-threatening disease (For list of disease please refer to rider sale document). The compensation is provided over and above the basic sum assured in periodic pay-outs or lump sum payments, making it one of the most preferred types of riders in insurance.

Some of the severe illnesses covered in the critical illness riders in insurance are cancer, kidney failure, heart attack, paralysis, stroke, major organ transplants, and more. Axis Max Life Insurance offers a critical illness rider that covers upto 64 crucial ailments. Being one of the best critical illness riders in insurance available, it eliminates the need to invest in standal0ne health policies, which may cost higher.

Also Read: Features & Benefits of Axis Max Life Critical Illness Insurance

2. Waiver of Premium Rider

Waiver of Premium Riders in insurance offers the option to waive all the future premiums in specific situations.

For example, suppose Mr. A meets with an unfortunate accident that causes permanent disability or has suffered from a critical illness. In that case, he may lose his source of income as a result. Waiver of premium rider is one of the most preferred riders in insurance that recognize the policyholder's inability to pay premiums.

If Mr. A has not invested in the rider, the policy will collapse and cause him significant financial trouble. Whereas, if he does have such riders in insurance in place, all future premiums will be waived off without affecting the policy's coverage.

3. Accidental Death Benefit Rider

Accidental death benefit riders in insurance allow the policyholder to reduce the stress on their finances substantially. In case there is a loss of life due to an accident, this rider offers financial compensation over the sum assured.

In general, such riders in insurance provides an additional benefit equal to the sum assured in the first place, thereby increasing the total insurance benefit. For families with a single income source, this rider in insurance can prove to be immensely helpful.

4. Long-Term Care Rider

Long-Term Care riders in insurance offer monthly payments if the insured has to receive home care or stay at a nursing home. There are standalone long-term care insurance policies provided by many insurers. However, depending on your requirements, you can choose such riders in insurance to take care of your long-term care costs.

5 Accelerated Death Benefit Rider

In case the life insured suffers from an illness that considerably reduces their life span, the accelerated death benefit riders in insurance offers financial compensation in advance. The insurance provider may withdraw the amount received along with interest from the compensation assigned to the beneficiary.

6. Family Income Benefit Rider

The family income benefit riders in insurance provide the insured's family with a steady income every month. It is essential to determine the number of years the family is entitled to receive the pay-out after the insured's demise.

7. Guaranteed Insurability Rider

Guaranteed insurability riders in insurance allow the policyholder to purchase additional coverage within the stated period without a further medical examination. Such a rider in insurance may prove to be of use in times of significant life-changes such as marriage, child's birth, increase in income, etc.

Benefits of Riders in Insurance

There are many advantages of riders in insurance that make it a valuable investment. Here are some of them:

Riders in insurance eliminate the need to invest in standalone insurance policies that might cause financial stress to the policyholder
In times of an unprecedented crisis, you need all the help you can get. Riders in insurance serve the purpose of reducing the strain on your pocket during difficult times
As there are tax benefits on the primary insurance policy, India's government recognizes riders in insurance to be eligible for such tax benefits. The IRDAI has set guidelines when it comes to life insurance riders

How Can You Buy Riders?

Most insurance providers offer a variety of riders in insurance with specific benefits. The terms and conditions may vary depending on your insurance plan and the insurer. It is essential to recognize your requirements and be well-informed about the riders in insurance.

In general, if you wish to add an extra layer of financial protection to your insurance plan, consult your insurance provider to know which riders in insurance are suitable. Some insurers also offer built-in life insurance riders. Most often, the insurer will provide you with the option of buying appropriate riders in insurance while purchasing a policy.

Riders Offered by Axis Max Life Insurance

There are many riders in insurance that are available to customize your plan. Axis Max Life Insurance recognizes that when it comes to insurance, every individual's needs are different. Here are some of the riders in insurance that will maximize the benefits of your plan. Note: Riders are available over and above Life insurance plans by paying extra premium.

1. Axis Max Life Accidental Death and Dismemberment Rider

Riders in insurance allow the policyholder to reduce the stress on their finances substantially. In case there is a loss of life or dismemberment due to an accident, the Accidental Death and Dismemberment Rider offers financial compensation over the sum assured. It is an affordable rider in insurance that ensures financial assistance to the loved ones in crisis times.

2. Axis Max Life Critical Illness and Disability Rider

When you add a critical illness rider to an existing term plan, it creates a comprehensive coverage for your loved ones. It is essential to calculate term insurance coverage the future financial needs to arrive at the suitable coverage that you require. The riders in insurance will amplify the benefits over and above the opted coverage if the policyholder is diagnosed with a life-threatening illness.

3. Axis Max Life Waiver of Premium Plus Rider

Among the many life insurance riders, the waiver of premium rider can substantially reduce financial stress on the policyholder and their family. As mentioned earlier, this rider in insurance waives all the future premiums if the insured loses their income source due to disability or a severe illness. The policy continues to remain in force as before.

Frequently Asked Questions (FAQs)

Q. What Are the Tax Benefits of Riders In Insurance?

Q. Can I Have a Rider in Insurance Without A Base Policy?

Q. Can I opt Out of a Rider Added To My Policy?

Q. When Can I Buy Riders in Insurance?

Q. How Many Riders Can I add to A Policy?

ARN No: Oct21/Bg/12A

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