Ch. 5: What Riders Are Available With Pension Accumulation Plans?

With old age come higher complications and medical emergencies. Retirement planning is important because it helps you achieve financial independence - even when you’re not earning anymore. A Pension Accumulation Plan is a type of Retirement Plan that provides you with a lump sum after retirement, and helps you cope with the adversities.

However, different people have differing financial situations and requirements, which further affect their insurance needs. And a base cover may not cater to those unique necessities. This is why customization helps.

With a Pension Accumulation Plan, you get a variety of add-ons, known as Riders. They aim to make your life easier and more comfortable, by ticking all the right boxes and enhancing your policy.

They are add-on benefits that you can add to your Pension Accumulation Plan by paying a reasonable premium, to extend the coverage. Riders are convenient, because you don’t need to do any extra paperwork or medical tests. And they save your time, as you don't have to manage another insurance policy, and can get the benefits of many in one.

Hence, with riders, you can protect yourself and your spouse in every way possible.

You can personalise your plan with the following riders -

• Accidental Death Benefit Rider

  If you pass away due to an accident during the policy period, this rider provides the Death Benefit, and an additional rider benefit amount to your nominee (for eg. your spouse).
  
  Please note: The rider benefit is applicable only if the death happens within 180 days of the accident.
  
  For instance, Kumar, 40-years-old, starts investing in a Pension Accumulation Plan. He also buys an Accidental Death Benefit Rider with a coverage of Rs. 5 lakhs. One unfortunate day, when he was on his way to work, a speeding truck crashed into his car. Due to fatal injuries, Kumar died on the spot. In this case, his nominee shall receive the Death Benefit under the Pension Accumulation Plan, and also the Rs. 5 lakhs, under the rider.



• Accidental Disability Rider

  When you meet with an unfortunate accident that leads to disability, your finances and lifestyle can get disrupted. Besides a loss in earnings, there will be an increase in expenses, like - building ramps, accessible property, making alterations across the house, etc. This rider will provide an additional sum of money, to financially help you and your family, in case you meet with an accidental disability.
  
  Please note: This rider might only provide cover in limited cases like permanent and total disabilities.



• Hospital Care Rider

  In case you need to get hospitalised for any treatment or surgery, this rider will provide you with a daily Cash Benefit to take care of your expenses.
  
  Please note: To avail the benefit under a Hospital Care Rider, you are required to be admitted to the hospital for a minimum period of 48 hours.



• Surgical Care Rider

  In case you are hospitalised for undergoing a surgery - for a minimum period of 24 hours - and actually undergo that surgery, you will be paid a lump sum benefit. The benefit amount will depend upon how the surgery is classified in the policy document - ‘major surgery (related to brain, heart, lung or liver)’ or ‘other surgery’.
  
  Please note: The policy term of the rider should not exceed the policy term of your base Pension Accumulation Plan.
  
  For instance,
  
  Mrs. Golmes, 38-years-old, has been diagnosed with Arrhythmias, a heart condition. She is required to be hospitalised for 4 days, and undergo an open heart-surgery worth Rs. 2 lakhs. She has an active Surgical Care Rider along with her Pension Accumulation Plan. It mentions that the insurer will pay her a sum of Rs. 1.5 lakhs (as per her policy) for a major surgery. Therefore, due to the surgical care rider in her policy, Mrs. Golmes will have to pay only Rs. 50,000 for the treatment from her own pocket.



• Critical Illness Benefit Rider

  
  In case you get diagnosed with any of the illnesses mentioned in the policy, this rider comes to your rescue. It provides you with financial aid that can be used by your family for all the additional expenses they will have to bear due to the disease/condition. It also makes sure they lead a good lifestyle, despite the unfortunate circumstances.
  
  This rider is generally of two types -
  
  • Accelerated Critical Illness Rider
    This will pay you an advance amount out of your total base cover. However, if you use the rider for a certain amount, your base policy cover will be reduced by that amount.
  
  
  • Comprehensive Critical Illness Rider
    Unlike an accelerated rider, a comprehensive rider will not affect your base cover amount. Here, the critical illness benefit is independent of the lump sum the Pension Accumulation Plan will provide.



• Waiver of Premium Rider

  This rider is of 2 types -
  
  • Waiver of Premium due to Disability Rider
    All your pending premiums will be waived off, in case you undergo injuries that lead to disability. This means, you can avail the insurance benefits during the policy term, without having to pay the future premiums.
  • Waiver of Premium due to Critical Illness Rider
    All your pending premiums will be waived off if you contract one of the listed critical illnesses. This rider will waive off all the future premiums of the Pension Accumulation Plan, as well as the attached riders - for the rest of the policy term.

• You get enhanced coverage and extra benefits without having to buy and manage multiple policies.
• Riders are convenient and time-saving, as you don’t have to submit any additional documents or paperwork, besides the ones you have already submitted for your Pension Accumulation Plan.
• You also don’t need to undergo any separate medical checkups or tests, apart from those you have already undergone while taking the base policy

• You don’t have a lot of options to customise your rider.
• There is no significant cost difference between a rider and standalone covers available for the same situation.

Riders are a great way to enhance your insurance coverage, especially if you have delayed your retirement plan for quite a while. While they may not have as many features or benefits as standalone policies for similar situations, they are a quick and convenient way to ensure extra protection, without burning a hole in your wallet.