Get to Know Everything About Riders in LIC Plans
LIC life insurance is vital to ensure financial protection and a consistent standard of living for your family, even in your absence. When it comes to life insurance, many LIC policyholders are unaware of the additional layers of security they can add to their policies through Riders in LIC.
LIC rider may be a whole new term for you as a first-time insurance buyer. Adding a rider in LIC policy is totally voluntary, but doing so brings comprehensive coverage and enhanced protection for the life assured against any unfortunate event in life.
Reading this article, you will get details about LIC riders and how you can provide an extra shield of financial security for yourself and your loved ones.
What is a Rider in LIC?
A rider in LIC is an optional or in-built additional layer of financial protection to the base plan that helps the policyholders gain additional coverage. These LIC add-ons offer tailored coverage to address specific needs, providing a more comprehensive protection plan.
LIC of India offers a range of riders designed to cater to diverse financial requirements, ensuring your policy aligns perfectly with your life goals. Ranging from Accidental Death Benefit, Disability, and Critical Illness to Premium Waiver, the policyholder can add these riders at the time of policy inception or anytime during the policy anniversary by paying an additional premium on top of the LIC policy.
Benefits of Adding Riders to LIC Policy
LIC policies already serve as a reliable foundation for financial protection against any life risk in India. However, policyholders can significantly enhance their base policy coverage by adding various riders tailored to meet specific needs. Let's explore the key benefits of adding riders to your LIC policy:
Customizable Protection
Since adding a rider is voluntary, yearly renewal or removal is possible depending on the changing financial needs and circumstances. Whether you prioritize protection against accidents and critical illnesses or seek to extend your life coverage, LIC riders offer flexibility to customize your LIC policy.
Increased Coverage
LIC riders boost the base policy coverage by providing an extra sum assured so your loved ones receive a substantial amount to live their life without any hiccups. LIC ensures the happiness of your family in your absence.
Cost-effective Solution
Adding specific riders to your LIC policy is a cost-effective way to obtain specialized coverage compared to purchasing separate policies for each specific need, whether health coverage or life risk protection. This allows policyholders to maximize their coverage without significantly increasing premium costs.
Tax Benefits
The premium paid towards LIC insurance riders is eligible for tax deductions under Section 80C of the Income Tax Act, 1961.
Tackle Loss of Income
When the life assured is diagnosed with a critical illness or accidental disability, they face a loss of income and cannot continue paying the premium. The LIC Premium Waiver Benefit Rider can provide the necessary relaxation and save the policy from lapse.
Peace of Mind
Addressing the potential risks and uncertainties with LIC riders brings peace of mind. It allows you to face the future confidently, knowing that your insurance coverage is comprehensive and aligned with your unique financial goals. Also, it reduces the hassle of managing multiple life insurance plans.
Key Points You Should Know About LIC Riders
LIC riders are designed to complement and enhance your base insurance policy, offering tailored benefits to suit specific needs. Here are the key highlights that make LIC riders a suitable choice:
- Personal circumstances (health condition, death, etc.) coverage
- Lump sum payouts
- Simplified claim process
- Regular policy review
- Revival of riders with base policy
- Flexible premium payment option
- No surrender value
- Free look period same as base policy
Types of LIC Riders Available
LIC India offers the following types of riders to cover various life uncertainties and enhance your base life insurance policy coverage:
LIC Linked Accidental Death Benefit Rider
LIC Linked Accidental Death Benefit Rider is a unit-linked rider providing financial compensation to the beneficiaries in case of accidental death of the life assured. Such an unfortunate incident of death occurs within 180 days from the date of the accident, then Accident Benefit Sum Assured is payable to the nominee. No maturity value is payable.
Specifications:
- Minimum Sum Assured: Rs. 10,000
- Minimum Age at Entry: 18 years
- Accident Benefit Charge: Rs. 0.40 per thousand Accident Benefit Sum Assured
LIC Accidental Death and Disability Benefit Rider
ADDB Rider in LIC is a non-linked rider providing financial support to the family in case of permanent disability or death of the life assured within 180 days from the date of the accident. In case of accidental disability, the corporation pays the Accident Benefit Sum Assured in equal monthly instalments throughout the 10 years. Accident Benefit Sum Assured is paid to the nominee on the death of the life assured due to an accident.
Specifications:
- Minimum Sum Assured: Rs. 10,000
- Minimum Age at Entry: 18 years
Premium Rate:
- For Regular Premium Policies- Rs. 1.00 per annum per thousand Accident Benefit Sum Assured
- For Single Premium Policies- Rs. 8.00 per annum per thousand Accident Benefit Sum Assured
- For Limited Premium Policies- Rs. 1.20 per annum per thousand Accident Benefit Sum Assured
LIC Accident Benefit Rider
LIC Accident Benefit Rider is a non-linked, non-participating, regular premium-paying rider ensuring financial support to the family in case of accidental death of the life insured. If such an incident occurs within 180 days from the accident date, then the nominee receives the Accident Benefit Sum Assured.
Specifications:
- Minimum Sum Assured: Rs. 20,000
- Minimum Age at Entry: 18 years
- Premium Rate: Rs. 0.50 per thousand Accident Benefit Sum Assured
LIC Premium Waiver Benefit Rider
PWB Rider in LIC is a non-linked, non-participating, individual rider that can be added to the base policy. In case of the unfortunate death of the policyholder of the base plan, the future premium payments are waived under the base plan till the expiration of the rider term. However, the premium towards any rider other than LIC PWB will require continued payment. This PWB Rider in LIC can be opted along with the base plan at the time of inception of the policy or anytime during the premium paying term. Provided the outstanding premium paying term of the base plan, and the rider remained for at least 5 years.
Specification:
- Minimum Age at Entry: 18 years
- Maximum Maturity Date: 70 years
LIC New Critical Illness Benefit Rider
The New Critical Illness Benefit Rider in LIC is a non-linked, non-participating, individual health rider that helps reduce the financial burden on the life assured in case of diagnosis with any of the specified critical illnesses.
Under this rider, the Critical Illness Sum Assured is paid to the life insured only once during the policy term on the first diagnosis of any of the 15 critical illnesses. This rider can only be opted for at the time of policy inception with non-linked plans.
Specifications:
- Minimum Age at Entry: 18 years
- Minimum Sum Assured: Rs. 1 Lakh
LIC New Term Assurance Rider
New term riders in LIC provide life cover in case of unfortunate death of the life assured during the cover period. In case of death of the life assured during the rider term, an amount equal to Term Assurance Rider Sum Assured is payable to the nominee.
The term rider in LIC can be added to the non-linked plans and can only be opted for at the time of policy inception.
Specifications:
- Minimum Age at Entry: 18 years
- Minimum Sum Assured: Rs. 1 Lakh
- Rider Term: 5 years to 35 years
LIC Premium Waiver Benefit Rider (with Auto Cover)
LIC Premium Waiver Benefit Rider provides for the facility of waiver of future premiums payable under the base plan in case of death of the policyholder of the policy during the premium paying term.
The Auto Cover facility provides an extended benefit to the policyholder. If the LIC Premium Waiver Benefit Rider (with Auto Cover) is opted for, and at least two full years of premiums have been duly paid, the policy shall remain in force and the premium waiver benefit cover shall continue for a period of two years from the due date of the first unpaid premium. In addition to that, the extension of Auto Cover Period for 2 years is allowed by paying one or more instalments of premium with interest. During this period, the premium waiver benefit should remain in force.
Specifications:
- Minimum Age at Entry: 18 years
- Minimum Sum Assured: Rs. 25,000
How to Choose a Right LIC Rider in LIC Policy?
Selecting riders for your LIC policy is a straightforward process, and it can be done when buying a new LIC policy or even adding to an existing one on any policy anniversary. Here's a step-by-step guide on how to select LIC Riders:
Understand Your Needs
Assess your specific needs and financial goals before purchasing LIC riders. Understand the potential risks you want to address, such as accidents, critical illnesses, or the desire for increased life coverage.
Consult with LIC Advisor
LIC advisors are knowledgeable professionals who can guide you through the available riders in LIC, explaining their features and benefits based on your personal requirements. Find an LIC advisor nearby with the help of RenewBuy Advisor Connect and book your appointment.
Select the Suitable LIC Rider
Based on the consultation, choose the rider(s) that align with your needs. LIC offers various riders, including Accidental Death Benefit Rider, Critical Illness Rider, Term Rider, and more.
Complete the Rider Application
Fill out the necessary application forms for the selected LIC riders. These forms typically require information about your health, lifestyle, and specific details about the chosen rider. Depending on the rider and age, LIC may require a medical examination to assess your health condition.
Review and Confirm Premium Cost
Understand the additional premium costs associated with the selected LIC riders. Review the impact on your overall policy premium and ensure it fits within your budget.
Policy Issuance with Riders
Once your application is processed and approved, the riders will be added to your LIC policy. You will receive a revised policy document that includes the selected LIC riders.
Periodic Policy Reviews
Periodically review your policy, including the riders, to ensure that it continues to meet your evolving life goals. If necessary, you can adjust your coverage with the guidance of an LIC advisor.
Final Words
LIC of India understands the uncertainties of life and offers riders a way to strengthen your financial outlining. Whether it's protection against accidents, critical illnesses, or a desire to enhance your life coverage, riders in LIC provide a customizable solution for the policyholders. By understanding and leveraging these riders, you empower yourself to face the future confidently, knowing that your loved ones are safeguarded against life's unpredictable twists and turns.
Once you add riders to the LIC policy, complete all the premium payments online, track LIC policy status, and revival status on LIC e-services portal. Just log in to LIC Customer Portal with your credentials.
Learn more about simple steps to register on LIC Customer Portal.