People buy life insurance to cover the risk of sudden or early death. Life insurance acts as an income tool to financially protect the deceased’s family so they can manage their finances effectively without getting a loan or credit. However, an individual may face other uncertainties and risks in life even right after buying an insurance plan. This is where customizing an existing life insurance policy with riders can come into play.
What are Life Insurance Riders?
Life insurance riders are additional benefits and coverage that a policyholder can buy and add to a basic life insurance plan. They are used to customize a life insurance plan to get different benefits and protection to meet certain conditions. Buying a life insurance rider means paying extra, but the premium is low because little policy underwriting is required.
Reasons Of Adding Riders to Insurance Plans
Instead of buying multiple insurance policies, customizing a basic life insurance policy with riders is highly recommended by experts. Below we have listed some benefits of customizing life insurance with riders.
No Need of Multiple Policies
An individual may need to buy different policies to meet different types of protection. They are not just expensive, but difficult to handle as well. But when you customize a basic insurance plan with appropriate riders, you don’t have to buy different policies and you can easily bridge the gap by investing in appropriate riders. There will be no need to choose different policies if the insurance provider allows you to add up riders to a policy.
Better Protection and Enhanced Coverage
The core purpose of adding life insurance riders to a basic policy is to get enhanced benefits and protection. For instance, the death benefit of a plan is adequate but the policy will be useless if you are injured and unable to support your family financially. This is where adding a rider to your policy comes in handy. When a rider is added to the policy, you can get enhanced protection in several uncertain situations like disability, job loss or accident, etc. Riders when selected wisely can offer greater protection against several risks like serious illness or permanent disability that you may face in near future.
Save money on Taxes
Life insurance riders come with different tax benefits. For instance, adding a medical rider to your basic insurance plan can help you get a significant exemption. As a result, you can save a lot of bucks that you can invest somewhere or spend on other things.
The Facility of Premium Waiver
What if you are disabled for a particular span of time due to an accident and unable to financially support your family and pay insurance premiums? You can customize your basic plan with a rider so your policy would not lapse and you can keep it continue. A rider with premium waiver benefits allows you to get premium waivers in case of an uncertain situation. As a result, you are allowed to have the policy with paying the premiums and you can avail the benefits too.
When you buy a single child care policy and need to fulfill all the essentials like education, healthcare, and other day-to-day necessities. But you can also add a child care rider into your basic plan to enjoy special benefits for your child’s care even without buying a stand-alone policy for this purpose. There are many other special coverage and benefits that come with a child care rider. It will not only secure your future but also add an extra cover-up for your plan so you can meet all the needs of your growing child.
There are many other reasons you should customize a basic life insurance plan with riders instead of buying different plans. All of them lead to a secure future even without spending extra bucks in terms of paying premiums for other policies. Hence, one should choose appropriate riders to enjoy enhanced protection and benefits.