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Ask Mint | Riders provide additional cover

Ask Mint | Riders provide additional cover
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First Published: Mon, Sep 01 2008. 12 15 AM IST

Updated: Mon, Sep 01 2008. 12 15 AM IST
The insurance business in India isn’t just growing, but also becoming more sophisticated in terms of product offerings. To help readers keep ahead of developments in this business, Mint features a Q&A on insurance every Monday.
I am a 27-year-old teacher. I would like to invest in an insurance plan, and would also like to know about riders. Do traditional insurance policies offer riders?
A rider on the insurance contract provides additional protection against risk. You can buy a basic insurance policy and add riders to the policy to include extra protection such as additional accidental death cover, disability cover, critical illness cover and hospitalization benefits. Although you need to pay an additional charge (premium) towards rider coverage, these additional charges are normally lower than individual policies that provide the same benefits. If the event that has been insured against through rider coverage occurs, you or your beneficiaries will be paid rider benefits. Yes, some traditional plans do offer riders.
What are guaranteed cash payments in terms of a life insurance plan?
Guaranteed cash payments are payments made at regular intervals during the term of the policy. This feature is usually found in permanent insurance plans such as whole life and endowment plans. The payments are guaranteed and are made as long as the insured person is still alive.
I have recently started working. At the moment, I am earning Rs11,000 per month. What kind of policy can I think of investing in, as I would not be able to afford a high premium amount?
The policy you should invest in depends upon your age, long-term financial needs and earnings. We advise that you take the Financial Health Check service offered by the financial planning advisers of insurance companies such as Aviva. Depending on your life stage and earnings, this tool assesses and recommends the right insurance product for you.
Readers are welcome to write in with their queries to askmint@livemint.com. The questions will be answered by senior executives from leading insurance firms.
This week’s expert is Bert Paterson, managing director and CEO, Aviva India.
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First Published: Mon, Sep 01 2008. 12 15 AM IST