“So how am I going to make sure of the riders ?”
“I like your post on the riders but how about some real life examples ?”
The above messages were just two of the more polite texts from my friends after my last post on insurance riders.
Others include sprinkling of unspeakable vulgarities.
If you have yet to read my last blog post on insurance rider, please DO NOT read it.
I tried to persuade my editor to take it down and no amount of begging could change his decision.
Therefore, I decided to write the same topic again to redeem myself (and to spite my editor).
Here are six situations whereby an insurance rider will come in handy
Imagine this. You have just married your childhood sweetheart and purchased a dream home.
You love her and want to protect her in every possible circumstances.
That is for both life and death situation (yes, I am a romantic) but it seems impossible to look after her if you are not around anymore.
Fret not. At the very least, you can continue to look after her financially.
When you have a housing loan, it is usual to insure your life to retain the property for your loved ones.
You may purchase a Term rider to be attached to your existing policies instead of buying a fresh one.
Why not a new policy?
A brand new policy includes a new set of policy fee and underwriting whereas some insurers will allow a term rider to be added without further medical underwriting.
This way, you will save some money while achieving the same purpose.
However, some insurers may not allow a fresh Term rider to be added so you may wish to check with them on this possibility.
Suddenly you are diagnosed with a Critical Illness and unable to work.
You are able to claim a good amount from your Critical Illness insurance to help you with the expensive medical procedures.
However, you still have to pay for the premium for other whole-life policy. Luckily for you, your insurance adviser has recommended you to buy the Waiver of Premium rider.
Now you are able to rest easy.
Waiver of Premium rider allows you to stop paying for insurance premium in certain events. Usually the covered event is either Critical Illness or Disability.
We like to highlight that Waiver of Premium usually lapses after you reach the age of 62-65.
In addition, if you have a limited premium payment period (e.g you pay for 20 years for whole life cover), it will be highly beneficial to have this Waiver of Premium benefit since you will only need to pay for that 20 years only.
Holy cow ! You triumph over your CI and leading your normal life. However, there is this little problem that insurers are rejecting your new application due to averse risk. Dammit insurers !
If you only have CI policy with Term & other riders, your policy will cease once you have made a CI. claim. You no longer have any coverage.
However, if you have a term or whole-life plan with CI rider, you may make a claim on the CI rider and the main plan continues on.
Therefore, upon recovery from CI, you will still enjoy the protection of your term/whole-life plan.
You have changed your job to one of more hazardous nature.
If you are in the line of fire daily, it is best to take up the necessary precaution.
Wear your safety boots, put on your helmet and get yourself a Personal Accident rider.
Unlike conventional life policies, it actually covers for partial disability such as loss of limb, sight, speech, hearing etc.
This will allow you to widen your coverage scope of your insurance policies.
One thing to note that the premium of Personal Accident rider will vary according to your job risk.
Ouch ! You are injured and need to be hospitalized for a while.
Heng ah, you have a Integrated Shield Plan rider that will help you to pay for the deductible and co-insurance portion.
As you have upgraded your CPF Medishield Plan to an Integrated one and purchase an rider, you have little worry that your hospital stay will create burden on your family members.
Now you can focus your attention to getting well !
You are self-employed or not covered by your employer for medical leave.
If you are the latter, we shall highly recommend you to change your employer.
Nevertheless, if that is not possible, you may need to take steps to cover for your loss of income during illness or injury.
Hospital Cash rider will not be able to replace your income completely. However, having a little cash during your stay at hospital may help you pay for fixed monthly expenses such as housing loan, electrical bill and milk money for your children.
That concludes the six ways of maximizing the use of insurance rider in real life application.
I hope that you are able to make full use of riders to broaden your insurance coverage after reading this blog post.
Certainly I hope you share the same sentiment that this is much more practical blog post than the previous one that I have written.
If you have any other ingenious ideas of applying riders to your insurance, please leave us your comment.
Thank you and have a great Sunday ahead !