Insurance is a way to minimize loss and cover the risk of unpredictable future. There are different types of losses and risks. Every person has different risks depending on his situation or business. There are thousands of risk involved in a life and to cover these risks insurance in taken. But due to wide range of risk and wide range of demands only one plan or policy cannot help a person. There is need to cover many risk under one policy. The insurance company cannot make a new plan for every person. It have developed few basic plans and addiction and deduction is done on the features of the plan with the help of riders. Riders are additional features which can be added to a basic plan to cover extra or another risk or situation attached with the choice of the proposer. For example, if death of a person happens due to accident the sum assured is doubled. Extra premium is paid for riders. For most of the life insurance riders premium is constant not depending on the age or the underwriter's decision.
To sum up we can say that riders are options which are offered to the prospect to cover his risk effectively. With riders given as option with basic plan the prospect has number of options to choose from. Any plan can be taken with one or more of the riders. According to a calculation a combination of 2 basic plan and 3 riders effectively give 100 or more options.
Some riders given with Life Insurance policy in India are :
Increased death benefit being twice or more the survival benefit.
Participation in the valuation surplus.
Increase cover within specified limits or dates.
Cover to continue beyond maturity age for same sum assured or higher sum assured.
Option to take out a policy on the life of the spouse.
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