If you do not have 5 minutes to read this article, just take the short cut No, you don’t need the riders.

I have taken this title from the original author Aarati Krishnan who published this article yesterday.

I do not think you should take any riders in your term insurance plan because not all insurance companies allow you to drop the riders halfway through the plan. Let’s look at each of the riders.

1. Accidental Death – suppose you are comparing 2 term insurance plans and both have AD rider, one has a premium of Rs. 400 and the other has a premium of Rs. 745 – you will swing towards the cheaper plan till you have a Subra saying “look at plan B because plan A does not cover accidents happening inside the house”. Riders are not as strictly worded as the main policy, so hey you got a lemon!
2. Disability rider: One of the toughest clauses to understand. You need to be an underwriter or at least an actuary to be able to understand this. I am still wondering how the insurance company will estimate my income if I lose my voice box. Just kidding.
3. Critical illness rider: Obviously very expensive. It is easy to understand that term insurance is cheap, but understand that term insurance pays ONLY in case of death? However critical illness pays for (SAY) kidney failure OR liver failure OR heart attack – the “OR” adds up so the policy is expensive. You do not choose to buy or not buy an insurance based on price alone. How to buy critical illness is a separate topic, but buying it online without understanding what it covers is height of foolishness.

My take is simple – Just don’t take the riders. Stay away. You will not go wrong.