An insurance rider is an amendment to the terms and conditions of coverage under standard insurance contracts. Though a rider is normally used to increase the scope and value of cover, it is also occasionally used to reduce the cover. For instance, if you are buying a life insurance policy and cannot afford the standard premiums, you can request an insurance rider to the policy that will reduce the value of the cover and therefore reduce your premiums. Before requesting a rider, you should carefully check the terms and conditions of the standard policy and ask for an explanation of anything that you do not fully understand. You should also ensure that the rider that your request does not duplicate any terms and conditions of the standard policy otherwise you would just be wasting your money. If your needs require an enhancement to the standard policy, make sure that the standard policy together with the rider fulfils all your requirements.
You should always bear in mind that a rider is merely an addition or a supplement to the standard insurance policy and is not a stand-alone insurance product or contract by itself. In other words, if you do not have a basic insurance contract, the insurer will not provide you with a rider. For instance, if you have a standard whole life policy and you would like term insurance, the insurer will generally provide you with a rider to your existing policy as a means of amending the cover. You should always balance the request for a rider for additional coverage against the cost of that coverage and ensure that you are getting value for money. Make sure that the benefit that you receive justifies the additional costs that you must pay. You can also use a rider to eliminate or reduce the scope of cover for coverage that you do not fully require.
Some of the more common riders available in the Singapore insurance market described below:
- a term rider is the equivalent of attaching a term insurance policy to your basic life insurance
- total and permanent disability rider. This cover is normally part of the basic life insurance contract. If your contract does not include this, you may request the issue of a rider to add this to your coverage
- an accidental death benefit rider will add a form of personal accident insurance to your basic cover. Normally, in the event of death or accidents, you will receive a payment additional to the basic payout under the policy
- a waiver of premium rider will prevent the policy from lapsing if the insured is unable to pay his premium because of disability or critical illness. This is tantamount to a waiver of the premium payable
- a critical illness rider will mean that the insured will receive an additional payment in case he contracts one of the critical illnesses specified in the policy.
- a guaranteed insurability option rider gives the insured the right to take out an additional insurance at the specified times (for instance that the ages of 30, 40 and 50) without the need to provide additional evidence of insurability.