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Ask Mint Money | Riders help you buy additional cover at nominal cost

Ask Mint Money | Riders help you buy additional cover at nominal cost
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First Published: Tue, Aug 09 2011. 08 48 PM IST
Updated: Tue, Aug 09 2011. 08 48 PM IST
I am 28 years old and want to take a life cover. What kind of riders should I look at?
-Puneet Singh
Riders, as the name suggests, are added covers that protect you against risks. The risks covered are loss due to death, critical illness, disability and accident, among others. Riders are available with most of the insurance products and their inclusion gives you added protection at a nominal cost. Based on your eligibility and need for protection, you can decide on the riders. I suggest that you seek advice from a certified financial consultant as well.
I am 35 years old and plan to invest in a unit-linked insurance plan since I want a combination of investment and protection. Which policy is good?
-Samarjeet
There is no easy answer to what is a good policy. There is a good financial plan with clear financial objectives and a roadmap to achieving them. Some times you need more than one plan to meet your goals and purchasing a combination of plans makes sense. I would suggest that you contact a certified financial consultant and insist on discussion on your financial goals and objectives. Insurance plans should be a solution to the financial goals and risks you identify during the course of the discussion. You must make sure you study the product brochures, compare the illustrations or the potential returns in the similar category and try to understand the growth of your fund vis-à-vis the costs.
I am 28 years old and want to opt for a term plan for Rs 1 crore for 30 years with add-on riders. I am not keen on private insurance providers since most are relatively new entrants. Please explain riders and benefits.
-S. Yadav
Pure term plans are cheaper compared with other life covers as there is no element of savings and the premium charged is only for the risk cover (death benefit during the term of policy). Term plans are cheaper when bought online. Since the cover you seek is for Rs 1 crore, you may need to go for medical tests to assess your current health condition. Assuming that you have the eligibility, as a consumer, you can decide the provider with whom you are most comfortable with. The price of the term plan, the sales experience, claim settlement history and the company brand name can be the parameters that you must evaluate before deciding on the company and product.
Riders are additional covers available on an optional basis. They help you to buy additional cover at a nominal cost. Based on your eligibility and need for protection, you can decide on the riders. The most common riders with term assurance are critical illness riders, accident benefits, disability riders and terminal illness benefits.
Queries and views at mintmoney@livemint.com
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First Published: Tue, Aug 09 2011. 08 48 PM IST