Getting to Know the Rider: Important Additional Insurance to Consider One of the important keys needed to achieve financial independence is the possession of adequate insurance protection.

Insurance helps you manage financial risks that can disrupt personal financial stability. Some of the main insurance that is important for everyone to have include health insurance, and life insurance for the breadwinner of the family.

To get adequate protection, it is important to make sure the insurance you choose provides complete benefits as needed.

In Insurance, there are many new terms that are important to understand in order to help someone get
Insurance that suits your needs. One term that often appears is the rider. Rider is basically an additional insurance benefit.

Quoting Investopedia, rider is additional insurance that is provided to complement the benefits that are already owned by basic insurance. You cannot buy a Rider without first buying basic insurance.

For example, ABCD life protection is term life protection. This insurance acts as a basic insurance where the main benefit is to provide life protection for the Insured in the amount of the Sum Assured (UP) listed in the policy. As basic insurance, the ABCD life protection can also be expanded with additional benefits in the form of health insurance.

A concrete example is life protection from PT Asuransi Jiwa Manulife Indonesia, MiSSION (MiSmart Insurance Solution). Protection that provides 3 in 1 benefits (Life Protection, Investment and Health) can be added to riders starting from protection insurance for critical illness MiSmart Critical Care, MiSmart Health Care health insurance, Waiver of Premium, and MiSmart Early Stage Critical Care

Adding benefits to insurance, of course, affects the amount of premium you have to pay. However, generally the premium price for additional insurance can be cheaper.

Therefore, it is important for you to know what are the benefits of insurance protection that are needed. That way, you can wisely and carefully choose the right additional benefits or riders according to your needs and ability to pay premiums.

Common Types of Riders Offered by Life Insurance

There are several types of riders that you can choose from when buying life insurance. This rider is an additional protection that is commonly offered in a life insurance product. Here are some of them:

  1. Waiver of Premium

This is the rider most often offered with life protection products. This additional protection provides premium waiver benefits in the event of permanent disability due to illness or accident experienced by the insured. By choosing this rider, basic insurance can continue.

  1. Health Insurance

Health insurance is also often a life insurance rider. The protection provided by this rider is reimbursement for treatment costs when the insured listed in the policy is admitted to the hospital. In a rider, the name of the insured is not only the life insurance insured but can also include the names of other family members such as wife and children. The health insurance coverage period follows the basic insurance contract.

  1. Accident Insurance

This rider provides coverage benefits when the insured dies due to an accident. If the accident occurs and results in direct death within approximately 90 days, the beneficiary will get two benefits at the same time, namely the sum insured (UP) from life insurance as basic insurance and the sum insured (UP) from the accident insurance rider (double indemnity).

  1. Disability Insurance

This additional protection provides coverage when the Insured suffers loss of limb function which results in a condition of total, permanent or partial disability. For example, when the Insured loses one hand, a certain percentage of the Sum Assured (UP) will be given.

  1. Payor Benefits

This rider provides premium exemption benefits in the event of death of the premium payer (policy holder) or when there is permanent total incapacity due to illness experienced by the premium payer. The beneficiaries of this payor benefit are children. Usually this rider is owned by education insurance.

  1. Critical Illness Insurance

This additional protection provides coverage if the life insurance insured experiences a critical illness as stated in the policy before a certain age.

Why is Additional Insurance Important to Consider?

The new insurance benefits are optimal if the available protection coverage is in accordance with your needs. For example, a family head not only needs life insurance for himself as a breadwinner, but also requires health insurance both for himself and the insured family. Taking advantage of the riders offered by basic insurance can help someone meet their protection needs more efficiently in one policy.

Here are some reasons why it’s important to use riders:

  1. More Complete Insurance Benefits

The basic reason why you need to consider taking out additional insurance is so that the life insurance you have becomes more functional and has a wider range of benefits. For example, life insurance provides protection for the economic value of a family head. Losing the main source of income because the breadwinner dies can be said to be a big financial shock for a family.

However, there are other risks that can also trigger family financial problems, namely when the main breadwinner suffers an accident or permanent disability so that he can no longer work, or when a breadwinner experiences an accident which causes him to need expensive treatment.

Thus, the risk faced by breadwinners is not just death. Therefore, adding a rider in the form of accident insurance or permanent disability can make your life insurance more optimal in providing protection for family finances.

  1. Expanding Protection Value

Adding riders to basic protection can expand your protection value. For example, your life insurance has a coverage value of up to IDR 2 billion with a premium of IDR 1 million per month. By adding a critical illness insurance rider with a premium of IDR 500,000, for example, the protection you get is not just compensation for losses due to the cause of death but also benefits when the breadwinner or the insured has a critical illness.

For information, critical illness often requires medical treatment which is very expensive and long enough to risk shaking someone’s finances. With additional benefits, you can manage these risks more optimally.

  1. Premium Exemption

To get life protection, you are required to pay a certain amount of premium so that the insurance benefits continue. However, have you ever thought about how to continue paying the premium when one day you fall ill and need treatment for a long time so that you are forced to lose your income due to illness? Stopping paying premiums due to lost income will be very detrimental because it means you are giving up important life protection.

You can avoid that risk by adding a rider in the form of a waiver of premium in the life insurance policy that you buy. Waiver of premium allows a person to get premium waiver on basic coverage when the Insured experiences total disability due to illness or accident.

Ensuring that the insurance you have is able to cover effectively the risks that may occur, is one of the important efforts to maintain financial health.

Utilizing the available riders in a basic insurance can be an important consideration when you want to choose an insurance. So what are you waiting for?

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