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

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...
Read more

WEALTH TAX

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 WEALTH TAX   WHAT CONSTITUTES WEALTH? For wealth tax purposes, "wealth" means property , urban land, car, jewellery , yacht, boat, aircraft and cash in hand in excess of Rs 50,000. CAUTION POINT | Do not think you will have an easy escape from wealth tax by transferring your `wealth' without consideration to your spouse or minor child. Such assets will also be considered as your wealth. HOW TO DETERMINE YOUR TAXABLE WEALTH Add the taxable value of the above assets (computed as per the detailed rules for valuation) owned by you as on March 31 (for FY 2014-15, it will be March 31, 2015). In case you sold your car during the year, it will not be taxable wealth. Deduct loans if any obtained by you to acquire any of the taxable assets from the value of gross tax out for at least 300 days in a...
Read more

Equity Savings Fund

Invest Equity Savings Fund Online   The best part about these funds is that they are subject to equity fund taxation and at the same time are structured like MIP like funds . This new category, equity savings funds , offer a little of everything. They allocate money to equities & equity related instruments, and fixed income. They aim to generate returns by diversification. Such funds invest in fixed income and arbitrage to protect the investors from short term volatility and equity for capital gains. The best part of these funds is that they are subject to equity fund taxation and at the same time are structured like MIP funds.   MIP funds however are subject to debt fund taxation. Investors Equity savings funds are suitable for the following: First time investors who seek partial exposure to equity with less volatility and greater stability Investors seeking moderate capital appreciation with relatively lower risk Those wh...
Read more

How to Pick Top Performing Mutual Fund Schemes

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   How to Pick Performing Schemes  Funds that continue to stay in the top grade of performance over longer periods are the ones to bet on, advise investment experts   The mutual fund performance charts of the past few months make for an impressive reading. Funds across all categories boast of stellar returns. Sample this: The mid and small cap category has averaged 77 percent return over the past 12 months, with the best fund delivering a staggering 120 percent. The tax-saving funds also average an impressive 51 percent, including a fund which has soared 92 percent. Many of the table-toppers are funds of proven quality and track record. However, there are also schemes that are not that well-known. Some of these have rarely made it to the performance charts in the past, yet, of late, they bo...
Read more

8% Government of India Bonds quick guide

For those seeking comfort in safety of returns, the Government of India issued 8% savings bond once again comes to the fore. First launched in 2003, these bonds are issued by the government with a maturity of 6 years. The bonds are available at all times with specified distributors through whom you can apply to invest in them. Here is a quick guide to what the bond offers and its features to ascertain to check for suitability. What are Government of India bonds Government of India bonds are like any other government bonds with specified rate of interest. The rate is fixed at 8% per annum paid half yearly, or you can opt for cumulative payment of interest at the end of the tenure. You can buy these bonds from State Bank of India and its associates, other nationalized banks and some private sector banks such as HDFC Bank Ltd and ICICI Bank Ltd, among others. The bonds can be bought from the offices of Stock Holding Corporation of India as well. They are available in physical form onl...
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