A Guide to Accident Insurance Riders

Life insurance is an unavoidable investment we all have to make. We can either choose between term life insurance, where your you or beneficiary receives a lump sum payment at the end of the term or in case of your death or ULIPs where half of your premium is invested  while the other goes to your life insurance.

These policies make sure that your family is taken care of financially when you’re not around. But what happens if you were to meet with an accident on contract a disease that puts you out of commission for a long, long time. Your Life Insurance will not take care of your family expenses when you are in no condition to work. This is when personal accident insurance or critical illness insurance comes into play. You don’t always need to purchase a new accident insurance plan to avail the benefits of it. You can simply purchase a rider to your term insurance.

So what is a rider? Imagine you’ve purchased a salad at salad bar, you then proceed to add dressing and toppings to the salad. In this case your term insurance plan is your salad, while your accident insurance rider or critical illness insurance is your rider. A rider is an insurance add-on which provides the policyholder with additional benefits apart from those offered by the term policy. It is used to enhance the cover of the policy.

There are two main types of accident insurance rider, here’s what they are

1.    1.) Accidental Death Rider: If you purchase this rider and the policy holder dies due to an accident, his or her nominee will receive and addition amount of money above the sum that has been assured to them in their term policy. For example, if your term policy assures you Rs.50 lacs and you’ve purchase an accidental death rider, your nominee will receive a sum of Rs.60 lacs in case you die in an accident.

2.     3.) Accidental Disability Rider:  If an accident leaves you partially or permanently disabled, then this accidental disability rider helps to substitute your income which you’ll lose due to your disability. With this rider, you get a percentage of the assured sum for a fixed period (five or ten years). Usually, this rider is offered along with the accidental death rider.

A simple step on your part can save your family a lot of stress and financial trouble. So, have you purchased your rider yet?