Insurance Riders Explained: LIC's Optional Add-On Covers

A rider is an optional add-on to your LIC policy for a small extra premium. Here is what the common LIC riders cover, in simple words.

When you buy an LIC policy, your agent may ask, "Do you want to add any riders?" This guide explains what riders are and what each common LIC rider does, so you can decide calmly.

What is a rider?

A rider is an optional extra cover that you attach to your main ("base") policy by paying an additional premium. It cannot be bought on its own. It adds something specific, such as cover for accidents or serious illness.

Points that apply to most LIC riders (checked in the New Jeevan Anand (715) brochure):

• Rider premiums are paid along with the base premium, and the same grace period applies.
• Riders have no surrender value and no paid-up value.
• If the base policy lapses, rider benefits stop. A rider can be revived only along with the base policy.
• There are limits on how large the rider premium and rider benefit can be compared with the base policy.

Common LIC riders

LIC's Accidental Death and Disability Benefit Rider

If the life assured dies in an accident, an extra lump sum (the Accident Benefit Sum Assured) is paid on top of the base death benefit. If an accident causes disability within 180 days, the plan 715 brochure says the same amount is paid in equal monthly instalments over 10 years, and certain future premiums are waived.

LIC's Accident Benefit Rider

This is similar, but covers accidental death only, paid as a lump sum. In plan 715, you can choose either this rider or the Accidental Death and Disability Benefit Rider, not both.

In plan 715, both accident riders can be added later during the policy, provided at least 5 years of premium payment remain and the life assured is below the age limit set in the brochure.

LIC's New Term Assurance Rider

This adds extra life cover for the policy term. If the life assured dies during the term, an additional amount, the Term Rider Sum Assured, is paid to the nominee. It is a low-cost way to raise the protection in a savings plan. In plan 715, it can be chosen only when the policy is first bought.

LIC's Critical Illness Health Rider

This pays a lump sum if the life assured is diagnosed with one of the specified critical illnesses, subject to the rider's conditions. Plan 715 offers two options with different lists of illnesses. It too can be chosen only at the start of the policy.

You may have heard of an older rider called the "New Critical Illness Benefit Rider". We did not find that name in the current brochures we checked; plans such as 715 and 714 now list the Critical Illness Health Rider instead. Older policies may carry earlier versions.

LIC's Premium Waiver Benefit Rider

This is mainly for child plans, where a parent (the proposer) pays premiums for a child's policy. If the proposer dies, the remaining premiums of the base policy are waived for the rider term, and the child's policy continues. It is available under plans such as Jeevan Labh (736) and Amritbaal (774), when the life assured is a minor. See also child insurance plans explained.

A simple example (illustration only)

Suppose Sunita buys an endowment policy with a Basic Sum Assured of ₹5 lakh and adds an accident rider of ₹5 lakh.

• If she dies of an illness, her nominee gets the base death benefit only.
• If she dies in a road accident, her nominee gets the base death benefit plus ₹5 lakh from the rider.

Should you add a rider?

• If you travel a lot or work in a risky job, an accident rider may be worth a look.
• If your family needs more cover than your savings plan gives, compare the New Term Assurance Rider with a separate term insurance policy.
• If you are buying a policy for your child, ask about the Premium Waiver Benefit Rider.

Not every rider is available with every plan, and age limits apply. Always read the rider brochure. Unfamiliar terms are explained in our insurance glossary.

Not sure which rider fits your family? Talk to us for a free explanation.