Riders are also common known as supplementary policy. These are special designed contracts for attaching to the basic life insurance policy ( e.g whole life insurance ). Most of the riders are not automatically added on when you purchase a policy – you will need to make a request to the insurers for the attachment of riders.
As rider policy is also considered as an individual policy, it is subject to the insurer’s approval. Normally, you will need to pay additional premiums for the riders. This is because the rider does also bring certain risk factors to the insurer.
Below are some common riders that you can find on the market:
1) Term Rider – It is similar to attaching a term life insurance policy to the basic insurance.
2) Total and Permanent Disability (TPD) Rider – A protection against contacting of TPD. It is usually issued as part of the basic insurance.
3) Extended Total and Permanent Disability (ETPD) Rider – This is an extension of the TPD rider. The ETPD will usually lapse faster than the TPD rider (normally one year earlier).
4) Accidental Death Benefit Rider – This will provides a kind of accident protection. The insured person will receive an additional payment on top of the basic sum assurance from the basic insurance if he/she dies from an accident.
5) Accidental Death And Dismemberment Rider – This is an add-on to the Accidental Death Benefit Rider to protect against loss of speech, thumb, limbs, etc.
6) Waiver of Premium Rider – This rider will prevent the policy from lapses when the insured person is unable to pay the premium due to TPD or critical illness. This mean that the premium of the policy will be waived.
7) Critical Illness Rider – As the name implied, the insured person will receive a payout benefit if he/she is diagnosed with one of the critical illnesses.
8.) Guaranteed Insurability Option Rider – This rider will give the right for the insured to purchase an additional amount of insurance at specific times such as at age 20, 30, 40, etc. without any need of evidence of insurability.
9) Payor Benefit Rider – If the person who is paying for the child insurances dies or becomes disabled, this contract will waive off all premium payments until the child reaches a specific age (e.g 21 or 25 years old).
10) Hospital Cash (Income) Benefit Rider – This contract will pay you a specific sum (fixed amount such as 150/day) of money if the insured person is admitted for hospitalisation due to sickness and accident, regardless of the hospital charges.
Riders cannot be sold individually. Thus, you will need to have a basic insurance in order to purchase a rider. And once the basic contract is canceled, the riders will lapses too. The insurer may reject your application if you want to reinstate the riders again.