Skip to main content

Life Insurance Riders

Download Tax Saving Mutual Fund Application Forms

Invest In Tax Saving Mutual Funds Online

Buy Gold Mutual Funds

Leave a missed Call on

94 8300 8300

 

Life Insurance Riders

 

You can choose to add some extra benefits to your basic life insurance cover in your insurance policy, by paying additional premium. These additional benefits are called insurance riders. Generally the extra premium for the riders is relatively low, since the extra premium goes towards covering the risk mentioned in the rider and not to savings. It is important to note that, the riders do not change the basic life insurance plan and the nominees of the insured will get that sum assured in the event of an unfortunate death of the insured. When a claim is made for the benefits of a rider, it can result in the termination of the rider, while the original life insurance policy continues for the insured.

A wide range of insurance riders are now available in the market at competitive rates. Riders are very popular and most life insurance policies have one or more riders attached to them. But are life insurance riders beneficial for you? It depends on your personal situation and your other insurance policies. However, some riders are almost always very useful. In this article, we will discuss some useful life insurance riders.

·         Permanent & Partial Disability: With this rider, you will get a certain percentage of the sum assured on regular basis, if you become permanently or temporarily disabled due to accident and can't work. This rider acts as a regular income in the event of a disability. The insurance policy specifies the amount of the income and whether it's paid for a certain amount of time or for the length of the disability. Most life insurance policies pay periodically for next 10 years a certain percentage of sum assured (e.g. 10% of Sum Assured per year for next 10 yrs). Please note that this rider is applicable only if the disability is caused by an accident.

 

·         Waiver of Premium Rider: With this rider, you don't have to pay the premium if you become totally disabled due to injury or illness and can't work. This rider can be particularly beneficial when the premium amount is quite high and prevents the policy from lapsing if the insured is unable to pay premiums due a disability. Please note that this rider expires at a specified age. You should carefully read the wording of this rider in the policy document.

 

·         Critical Illness Rider: This rider protects the insured in the event of a critical illness like Heart Attack, Cancer, Stroke, By-pass Surgery, Kidney failure, Paralysis etc. This rider pays out a lump sum amount if the insured is diagnosed with a specified illness, mentioned in the policy. Generally, the extra cover is equal to the sum assured on the base policy and is paid upon diagnosis of the illness.

 

·         Accidental Death Rider: With this rider the insured gets an extra amount, in addition to the sum assured if an accident results in the death of the insured. A common misconception among insurance buyers regarding this rider is that the insured will get death benefits, only if the cause of death is an accident. It is not true. The insured will get the sum assured in the event of unfortunate death, whatever the cause. If the cause of death is an accident then the insured will get an additional amount specified in the rider of the life insurance policy. However, if the sum assured in the basic policy is adequate for the needs of the family of the insured, then the insured need not buy this rider. Though in most cases, this is a very useful rider.

 

·         Guaranteed Insurability Rider: This rider allows the insured to buy additional life insurance coverage at a later date without the need for further medical examination or providing any evidence about insurability. As we age our health state becomes more unpredictable and if the insured contracts a serious illness like a heart disease or cancer, the life insurance company can increase the premium substantially for insurance coverage. With this rider, the insurance company considers only the age of insured for setting the premium, but not his or her health.

Other Life Insurance Riders

There are several other insurance riders like Spouse Insurance, Family Income benefit, Return of Premium, Renewal Provision, Withdrawal Provision, Surgical Assistance etc. The usefulness of these will depend on your personal situation and your other insurance policies. Remember riders come at a cost. So you should ask yourself or consult with a financial adviser, if you really need the rider.

Tax Benefit of Riders

All riders (other than critical illness) get tax benefits under Section 80C of the Income Tax Act on premium contribution of up to Rs 1 lac (Rs 1.5 lac as per the new Budget). Additionally, the premium paid for the critical illness rider qualifies for deduction from taxable income under Section 80D of the Income Tax Act up to the limit of Rs 15,000 (Rs 20,000 for senior citizens). Insurance buyers should also note that premium paid for waiver of premium rider also qualifies for deduction under Section 80D.

Conclusion

In this article, we have discussed some useful life insurance riders that you can consider adding on to your life insurance policy. Riders like Permanent or Partial disability and Accidental Death are useful at almost any age. Whereas critical illness, waiver of premium and guaranteed insurability riders are more useful as the insured approaches middle age. Read the policy document of the company for exact wordings. Due to competition in the Indian insurance industry, the life insurance companies are offering various products at very competitive rates. You should always compare plans of different companies before buying your life insurance policy.

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

Leave a missed Call on 94 8300 8300

Leave your comment with mail ID and we will answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

---------------------------------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund
      2. Franklin India Smaller Companies

E. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

Popular posts from this blog

Rs 14,000 Crore worth of tax free bonds coming soon from NHAI , PFC

  NHAI, PFC file prospectuses, coupon rate not yet decided MORE debt investment options have opened up for investors with AAA rated tax-free bonds worth over Rs 14,000 crore lined up. The National Highway Authority of India ( NHAI ) and Power Finance Corporation ( PFC ) are offering Rs 10,000 crore and Rs 4,033.13 crore worth of tax-free bonds, respectively, as per prospectuses filed with the Securities and Exchange Board of India (Sebi). Of a Rs 5,000 crore issue by PFC, Rs 966.87 crore has already been raised through private placement on September 28 and November 1. Tax-free bonds give investors tax-free return on any amount invested. In another kind of bonds, the long-term infrastructure bonds, investments up to Rs 20,000 are tax exempt, that is this cap amount can be deducted from the taxable income. Accordingly, the NHAI prospectus has clarified that only the amount of interest from -and not the actual investment on -its new bonds will be tax-free. "NHAI's publ...
Read more

Change in Fund Manager for some of HSBC Mutual Fund Schemes

Buy Gold Mutual Funds Invest Mutual Funds Online Download Mutual Fund Application Forms Call 0 94 8300 8300 (India) However, this facility is only available to Unit holders who have been assigned a folio number by the AMC.   HSBC Mutual Fund has announced that the below mentioned schemes shall be managed by the new fund managers as stated in the table. The effective date will be July 02, 2012.   Amaresh Mishra 's will be Vice President and Assistant Fund Manager. Having done a Post graduate diploma in Business Management and Bachelor of Chemical Engineering, he has over seven years of experience in Equities and Sales.   Mr. Piyush Harlalka's designation shall be Vice President- Fixed Income. Qualified as a C.A., C.S. and holding M.B.A.( Finance degree), he has over six years of experience in Fund management and ...
Read more

How EEE and EET Tax affect Retirement Investments

  An important factor while choosing a financial product is its taxation , and for retirement savings, this is even more important as the sums involved are usually life-long savings. Here's a look at the current tax treatment of three major long-term retirement planning products, which are - Employees' Provident Fund (EPF), Public Provident Fund (PPF) and National Pension System (NPS). EPF The tax treatment is EEE, which means your money is exempt from taxes at the time of investment, accumulation and withdrawal. At the time of investment, the tax deduction is under the limit of section 80C of the Income-tax Act , which is currently Rs 1.5 lakh. Partial withdrawals are also tax-free if made after 5 years of continuous service. If withdrawals are made before 5 years of service, 10% tax will be deducted at source. Exceptions have also been provided for transfer of amount and conditions wherein the subscriber is unemployed for more than 2 months or the loss of job was beyond th...
Read more

Personal Finance: You can insure your wedding

But luck may not always be on your side. With the frequency of such attacks, as also other risks and unforeseen accidents growing, a wedding insurance is something you may want to look at if a marriage is being planned in the family. Event insurance plans like this is still in its nascent stages due to low awareness. And given the sacred nature of the ritual, nobody wants to discuss or think negative. But as wedding spends and risks grow, it makes sense to cover the potential monetary loss. The policy in those countries even covers the loss of the wedding ring, the wedding gown not reaching on time and even the expenses/loss due to late or non-appearance of the photographer which may mean staging the event once again for the photograph. In India, most insurance companies — including ICICI Lombard General Insurance, Oriental Insurance, Bajaj Allianz and National Insurance — offer wedding insurance. The policy is tailor made to individual requirements and needs. The sum insur...
Read more

DSP BlackRock MidCap Fund

Best SIP Funds Online   HOW HAS DSP BlackRock Small & Mid Cap Fund PERFORMED? With a 10-year return of 14.61%, the fund has outperformed both the category average (12.34%) and the benchmark (10%) by a good margin. Should you invest in DSP BlackRock Small & Mid Cap Fund? This fund invests predominantly in mid-cap stocks but takes a sizeable exposure in small-caps as well. The focus is on nascent companies with high growth potential. The fund manager places emphasis on quality and avoids inferior businesses even if these look tempting from a valuation perspective. Over the past year, the fund portfolio has grown, having added to some of the underperforming sectors like chemicals and healthcare. Its portfolio churn has come down significantly. The heavily diversified portfolio is run completely agnostic of its benchmark index— most bets are from outside the index—which can at times lead to bouts of underperformance as seen in the recent years....
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now