When we start planning to invest our money to meet different financial goals in our life, we first start exploring the market and father information related to funding. This helps us understand what the market offers and how you can make the most out of it. Now the question is, will you take multiple policies to meet different financial goals and manage everything differently or move ahead with the current policies that offer various functionalities in one procedure. Indeed, you will want to have everything in one place, which is why ULIP is so popular nowadays.
Let’s discuss the different types of riders in ULIP and understand how adding ULIP riders benefit you. But before we move on to discuss this, you must clearly understand what ULIP riders are and how riders in ULIP policy function.
ULIPs and the Role of Insurance Riders
Unit Linked Insurance Plans (ULIPs) are modern financial tools that help save money through market-linked investment while enjoying the benefit of life insurance. It is the best option to take care of your life insurance and investment needs in the same policy and with maximum flexibility and control.
While ULIP offers significant flexibility in the investment part of the policy, you can ensure optimum safety by adding insurance riders to your policy for full-proof protection against unforeseen circumstances.
What are ULIP Riders? How do Riders in ULIP Policy Function?
ULIP Riders are like add-ons for your ULIP insurance policy. They can be purchased by paying a nominal fee. This helps you in customizing your ULIP insurance policy as per your requirements. Moreover, the ULIP policy riders help you enhance your protection against unforeseen circumstances. So, basically, through ULIP riders, a policyholder adds various other insurance benefits.
For example, you have opted for a life insurance policy that does not cover health and accidental insurance. So rather than opting for two additional policies, you can use ULIP riders to add these benefits to your policy.
Types of Riders in ULIP
Let’s have a look at some of the ULIP riders and the benefits that a policyholder can add to their existing ULIP policy:
1. Premium Waiver
Life is unpredictable, but you can be prepared for any unfortunate circumstance. For example, suppose your regular income is impacted due to some life-threatening event, maybe due to an accident that left you on disability or a chronic illness. Naturally, most policyholders will be worried about the timely payment of premiums. However, when you opt for the Premium waiver riders, in such a life-threatening case where your regular income source has ceased, all the future premiums of your ULIP policy are waived off, and your investment and life insurance cover continues towards maturity.
This ensures that even when you cannot earn, the life of your loved ones is not affected financially. However, before opting for this rider, you must look at the eligibility criteria and other details related to this ULIP rider.
2. Accidental Death
This is an add-on financial help to your existing ULIP life insurance if you lose your life in an accident. This ULIP rider ensures that the policyholder has additional financial cover in case of accidental death. So, suppose the ULIP policyholder with this ULIP rider linked to their policy dies due to an accident. In that case, the nominee will receive an extra amount as a ULIP rider sum assured in addition to the original life insurance policy.
3. Accidental Disability (total/partial)
This rider is an addon to ensure that if a policyholder meets an accident leaving them partially/disabled, they are eligible for a lump sum payout subject to policy terms and guidelines. This is one of the must-have riders in ULIP policy as it ensures that if your life is saved, but you are disabled and lost your regular source of income, you are still financially covered and will receive a lump sum for meeting daily living expenses.
4. Critical Illness Riders
This rider in the ULIP policy makes your ULIP plan life + critical health insurance policy. For example, when you’re diagnosed with a critical illness, the health insurance coverage alone might not be enough to cover all the expenses. This ULIP rider provides you extra support in such cases to support your financial needs without eroding your savings.
There are other riders as well that you might consider as per your requirements to add more support to your ULIP policy and to make it more secure for you and your loved ones in case of your absence. Riders are a great way to ensure you get the maximum benefits of a life insurance policy. However, it is strictly advised to read the policy documents of the riders and the things covered under its benefits and opt for them accordingly.
