With the opening of life insurance, plain vanilla products are passé. More and more insurance-seekers now prefer to buy their policy with riders. But are riders really worth that extra premium?

Most private insurers have in-built riders attached to their basic policy while others have flexible-plans, which can be designed to suit customer needs. These riders add to the cost of the policyholder, but assure him of an additional sum-assured in case of certain eventualities covered by the rider.

In case of flexi-plans, the customer has an option to attach the desired riders to the basic policy, which could be either endowment, money-back, whole life or term policy. As such, these customized plans are much better than the ready-made plans with the in-built riders.

The need of a rider with a life insurance policy actually depends on the insurance-seeker’s existing insurance, as well as additional medical and non-life covers available with him. Not only that, it also depends on his financial condition, his savings component and his liabilities.

For example, a person who already has an existing accidental insurance policy for Rs 1,000,000 (Rs 10 lacs) and has no liability may not be advised to include the accidental death benefit with his policy. However, if this same person is inadequately covered for life insurance and is financially incapable of take a larger cover may actually be advised to include the accidental death benefit. This is because the ADB (accidental death benefit) rider will cost much less than the additional cover required and will provide additional monetary protection to his survivors in case of his unfortunate accidental death.

It has been observed that policyholders if not guided properly tend to attach those riders to the policy, which are least useful to them and omit others, which may be critically important to their needs. Worst still, some people prefer to choose from ready-made plans available with the insurers thereby surrendering the freedom to choose.

The best thing to do when you are deciding upon a policy is to contact a financial consultant certified by IRDA (Insurance and Regulatory Development Authority). The certified consultant will probe you and design the best flexi-plan suited to your specific needs. He would also suggest you the riders which you need and justify the needs. To know more about flexi-plans and how they can be designed to take care of most of life’s eventualities, please register here,

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