Life Insurance Rider Policy : Commission 20 to 25%

IRDA (Insurance Regulatory and Development Authority) had capped distribution costs of ULIPs (Unit-Linked Insurance Plans) last September, 2010 as a pro-policyholder step to boost returns from ULIPs. Now entitled to 5% - 10% of the first year's premium instead of the earlier 25% - 30%.


Insurance agents commissions dried up and subsequently the ULIP sales down. So, now are looking at 'Riders' as their life line and best commission.
All life insurance agents, also companies are now promoting 'rider' policies, i.e., the add-ons with the base policy.
The rider policies are a good source of income. That is commission nearly 20 to 25%.
Because of heavy commissions, both insurers and agents are pushing these aggressively.

About Rider policies..!

Rider policies are the add ons with the base policy with low premium.. A rider offers a policyholder with extra benefits that are absent in the basic insurance plan. There are a number of riders like critical illness, accident benefit, permanent disability benefit, surgical care, hospital care, waiver of premium care etc. The cost of riders can range from about 3 to 20% of the main policy premium.

IRDA has stated that the total premium for riders cannot be more than 30% of the base policy premium.
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