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Term Insurance 436 views August 16, 2019
The concept of term insurance had stemmed from the need to financially secure your loved ones in the event of your sudden demise. Life insurance companies started offering term insurance plans as an effective measure to secure a financial cover to the dependent family in lieu of nominal premiums paid regularly for the entire policy period. However, the needs of customers increased and became largely varied, thus, necessitating companies to avail their customer’s additional benefits also called “Add-On Covers” to lure more people into buying term plans.
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As per the provisions of the Insurance Regulatory Development Authority of India (IRDAI), term insurance riders are in fact “add-on covers” that can be bought by paying an amount in addition to the basic premiums charged by the insurer. There are some insurance companies that include insurance riders in their base policy, thus, adding to the ease and convenience of their customers. As times have changed and life continues to be more fragile, listed are common term insurance policy riders that people must consider buying to keep themselves from unforeseen financial distress during trying times.
There are some kinds of critical illnesses or chronic disorders that can leave one disabled for life. This means that the affected person may be out of job or is unable to avail any employment opportunity when being treated. The resulting loss of income coupled with high costs of treatment may result in acute financial distress. Having this rider in place means that the expenses on treatment are taken care of, thus, easing the sense of financial burden on the families concerned. The customers paying extra towards critical illnesses riders are handed over a predetermined amount on diagnosis of any kind of critical illnesses including:-
This rider promises an amount over and above the basic cover in case of sudden death due to the accident. For example, if the policyholder has bought a term plan insurance and has opted for this rider too, then his or her dependents would be entitled to the amount of sum assured pursuant to the term insurance plan in addition to the sum assured on the rider. So, if the sum assured on a term insurance cover is Rs. 1 crore, while the coverage amount promised in lieu of rider payment is Rs. 20 lakhs, then the nominees of the policyholder will be entitled to a total amount of Rs 1,20,00000 in case the policyholder dies in an accident. However, family members of the policyholder who might not have opted for the rider will still be entitled to receive the sum assured in case of the sudden death of the policyholder owing to any reason barring suicide.
Any kind of unfortunate event, be it accident or disease can leave you disabled for life. This rider was created to protect you against any such eventuality that may make you partially or completely disabled, thus, hampering your earning ability for life. Coupled with the loss of income owing to loss of employment, mounting expenses of hospitalization and medical treatment can result in sudden and unforeseen economic instability. With this rider opted while buying a term plan, the insurer is liable to pay to the policyholder the predetermined sum assured for a fixed tenure. However, handing over the sum assured, whether in entirety or partial, depends on the kind of disability that the policyholder may have suffered. Complete disability begets the total amount of sum assured while partial disability induces the insurer to pay only a part of the sum assured depending upon the nature and extent of disability.
Heavy expenses towards hospitalization and consequent medical treatment follow the diagnosis of a terminal illness. Treatment of the medical illness condition is synonymous with heavy and incessant expenditure on payment of medical bills and other associated hospitalization expenses. Opting for the accelerated death benefit rider ensures that the nominees of the policyholder are handed over a part of the sum assured in advance. However, the amount of sum assured to be paid must be specified while opting for the rider. Available at nominal costs, this rider ensures your loved ones financial stability during those trying times of illness and healing.
Not all families may be financially prudent. This prompted the need for insurance companies to introduce the option of giving Income Benefit Rider to customers who were apprehensive of their loved ones received the entire amount of sum assured in a lump sum. As per the benefits of this rider, the policyholder can choose to opt for payment of the sum assured to dependents in monthly installments over a period of time as determined while buying the policy. This will not only ensure that your family’s financial needs are met but also eliminate any chances of your loved ones losing the sum assured amount to dubious schemes.
Policyholders often find it difficult to pay premiums after being afflicted due to an accident or any grievous illness. These critical problems may leave you disabled, thus, making it hard to earn a regular income and pay the premiums towards your plans regularly. One of the prerequisites of availing benefits of term insurance involves non-stop payment of premium payments regularly, which means that non-payment of premiums can result in the policy getting terminated. Opting for this rider means that the insurer is liable to waive off the premium payments in case of any unfortunate incident like grievous injury suffered due to accident or critical illness, thus, relieving you from the liability of paying regular premiums. The insurance company hands over the amount of sum assured to the dependents in case of the policyholder’s death.
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