When buying a car, you see different versions of the same car at different price points, from the basic model at the lower end to the top end model, fully loaded. But do you need ALL those add-ons? If you were allowed to add some of these features to the version you’re buying, does that seem a good deal? Most likely, yes.
The same add-ons are available with vehicle insurance. Or any insurance, for that matter, and are known as Riders.
A rider is an add-on provision or a supplementary benefit to a basic insurance policy that provides additional benefits to the policyholder at an additional cost.
Of course, like with cars, insurance add-ons or riders come with caveats. The add-on might not be a perfect fit to your requirements. Also, the specific rider you want might not be available with your version of basic insurance policy. Customising your insurance policy with riders gives you the bells and whistles you want.
Here are some of the more popular and commonly used riders with different types of insurance, namely life insurance, health insurance and vehicle insurance. This is not an exhaustive list. If there’s something specific you’re looking for, you can check with your insurer / agent.
Life Insurance Riders
Disability Waiver of Premium
With this rider, if you are affected by a disability covered by the policy, no need to worry about spending money to keep the policy in force as the premium is waived. The rider might come into action only after a certain time period of being disabled.
A regular monthly income equal to 1% of rider sum assured is payable in the event of Total Permanent Disability due to accident, for a fixed period of 10 years.
If you’re diagnosed with a critical illness (that is terminal in nature) covered by the policy, the insurer pays out a lump sum amount equivalent to the sum assured, or a waives off the premium, depending on the clause in your policy.
Accidental Death Benefit
In case of death by accident, beneficiaries can make an additional claim on the policy. Sometimes it includes additional payment for dismemberment – like loss of limb or sight. Insurers consider occupation and hobbies when determining premiums and high-risk activities will attract higher premiums.
Health Insurance Riders
Most basic health insurance policies do not cover maternity expenses. This rider covers expenses incurred during child birth. Some insurers also provides an option to cover new-born babies, from birth till end of policy tenure / maturity. Of course, you will have to keep an eye out on the required waiting period before this rider can be used, which is typically 24 months.
Room Rent Waiver
When you are ill enough to be hospitalised, the last thing you want to worry about is who you are sharing the room or washroom with, especially when you can afford a private room. A room rent waiver rider gives a higher sub-limit for room rental so you get the room of your choice without paying more.
Hospital Cash Rider
This rider gives you cash for every day you are hospitalised. If you have to avail of ICU facilities, you are allowed a higher claim. The rider comes into force only if you are hospitalised for 24 hours or more. Also, there is an upper limit on the number of days you can make a claim for.
Critical Illness Cover
Some insurers offer this cover with their regular plans, some offer it as a rider. Once diagnosed with a critical illness, the insurance company pays the policyholder the pre-approved amount as a lump sum, regardless of total expenses incurred during treatment.
This rider provides compensation in case of an accident leading to permanent total disablement, accidental death, permanent partial disablement and temporary total disablement. It is also called a double indemnity rider wherein the insurer pays additional death benefit if the policy holder dies in an accident.
Vehicle Insurance Riders
This rider covers the cost of damage to the engine, whether due to such water seepage or to the gearbox due to oil leakage.
Zero Depreciation Cover
On filing a claim, the insurance company pays the amount depending on the depreciated value of parts and accessories. This cover ensures you’re paid the entire amount as per market value.
Roadside Assistance and Towing
Covers you for 24×7 roadside assistance for having your vehicle towed, change of tyres, jumpstart the battery, getting a duplicate key etc.
Personal Accident Cover
Covers accidental death, temporary partial disability and permanent partial/total disability caused by road accidents.
Ambulance & Medical Expenses Rider
This rider covers ambulance transportation charges and emergency medical expenses for up to Rs 10,000.
However, when choosing a rider, be wary of duplication. As you would have observed, there is a lot of potential overlap between riders under different types of insurance.
Bottom line: Make sure you are not paying extra for something you already have.
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