Buy life insurance riders that align with your financial goals, risks

More Indian families are opting for insurance riders that offer protection against disability, critical illness (CI) and income loss, according to Policybazaar. South India leads this shift, with 45–47 per cent of customers purchasing at least one rider, twice the adoption seen in the northern markets. 

Riders are optional add-ons that expand the scope of a life insurance policy. “They offer extra protection against risks such as accidents or illnesses,” says Maneesh Mishra, chief product and marketing officer, Bandhan Life. 

Expand coverage at low cost 

Riders are cost-effective. “Rider premiums are significantly lower than those of standalone policies.

Standalone policies vs riders 

Standalone policies are more suitable when customers require higher or more specialized coverage than a rider can provide. "A policy specifically designed to cover a certain critical illness, for instance, will provide more flexibility, more comprehensive coverage than a CI rider, and possibly a higher sum assured," says Mishra. 

Riders have another limitation: their premium cannot exceed the base policy premiums, thereby limiting the level of coverage they can offer. 

Riders can have different terms. "Most riders are renewable only up to a certain age, or for a limited period, and do not necessarily extend up to the end of the base policy term. A waiver of premium rider, for instance, generally ends when the premium-paying term is attained," says Mishra.