A Unit Linked Insurance Plan (ULIP) can be a dual-benefit financial product, which can combine investment and life insurance under a single integrated plan. Although it might offer dual ULIP benefits, the ULIP policy might overlook specific scenarios such as loss of income, critical illness, accidental death, and so forth. While a ULIP policy can offer a life cover for the financial protection of your loved ones, it can provide riders to enhance your base policy. Riders are usually add-on benefits that can cover all the circumstances that might not be offered under your original ULIP policy. Therefore, let’s go through the most common riders provided by many insurers for better clarity:
- Critical illness rider
As the name suggests, a critical illness rider can cover severe health conditions such as kidney failure, stroke, cancer, heart attack, and so forth. With a critical illness rider, you can receive financial aid to treat such severe health problems. As a policyholder, you might be eligible to receive a sum assured amount if you are diagnosed with a critical illness. Typically, there can be various categories under a critical illness rider, which can depend from one insurer to another. The most common types of critical illness riders can be as follows:
- Critical illness plus rider
Under critical illness plus rider, your insurer can allow you to cover an additional number of diseases, unlike a regular critical illness rider.
- Critical illness woman rider
Under a critical illness woman rider, you can receive financial coverage for complications associated with your pregnancy.
- Waiver of premium rider
Waiver of premium rider or the life guardian rider can typically cover you against unfortunate events such as loss of income, physical disability, etc. Under such a scenario, you might not be able to afford the premium amount. When you might fail to pay the premium on time, you might be worried about the lapse of your ULIP policy. Hence, your insurer can help you keep your ULIP in force by waiving of the premium when you are struggling to make the payment.
- Income benefit rider
As the earning member of the family, you might have financial dependents. While your dependents might cherish your presence, they might suffer financially in your absence. If you wish to make sure that the financial well-being of your loved ones is guaranteed even after your demise, you should avail an income benefit rider. It can act as an income replacement that can help your family members to survive financially without your presence. After your demise, your insurer can pay approximately 10% of the sum assured value, which is applicable under the rider to your beneficiaries till the maturity date.
- Accidental death rider
Due to the unpredictability of life, you might not be able to control the unfortunate events such as accidents, collisions, road mishaps, and so forth. During an accident, you might either permanently or partially damage your body parts. The chances of physical disability can be high under such a scenario. If you suffer from partial or complete physical disability, loss of vision, death, etc., your insurer can provide 100% of the coverage amount to you. Besides, if there is a loss of one limb or one eye, you can be eligible to receive 50% of the sum assured value.
- Term rider
A term rider can provide the coverage amount to your nominees in your death. When you pass away, your family members might be unable to manage their finances. With a term rider, they can receive financial support to continue to maintain their current lifestyle after you. Moreover, they can lead a comfortable and secure future without any financial constraints.
In a nutshell, riders can be an essential part of your ULIP policy. Therefore, you should select the right type of rider based on your financial requirements and your family’s needs. If you avail many riders altogether, the original cost of your ULIP might increase. Research the various types of ULIP available and choose the relevant riders at an affordable rate to ensure your financial security in the future.