Term Insurance 1836 views November 10, 2019

Term Insurance Policy is a pure protection plan which ensures the financial security of your loved ones in your absence. Life is highly unpredictable and the bad times always come without any prior notice. If you are the only earning member in your family, then any such mis-happening can bring your family under both financial and mental trauma. So, a term insurance policy is your back up plan to protect your family and loved ones from any such financial hardships.

Term Insurance

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A term insurance plan will provide financial cover for your loved ones in the form of lump-sum known as the Death Benefit. Now, if you are willing to enhance or boost this cover and support for your family this can be done by term insurance policy riders.

What are Term Insurance Policy Riders?

Term Insurance policy riders can be said to an amendment that is made to the base term insurance plan which can boost the coverage provided by your term plan. Moreover, riders are said to be as add-ons or additional features that can provide you with comprehensive coverage. Riders are helpful to you in customizing your base term plan according to your needs. They will offer you additional benefits above the specified sum assured of your term plan. You can include riders into your base term insurance plan by payment of an additional amount of premium.

6 Important Term Insurance Policy Riders and Their Benefits

Let us have a look at the types of term insurance policy riders and the various benefits they offer.

Accidental Death Rider

The huge increase in the number of accidents occurring daily has become a great threat to life today. It has become quite necessary to enhance the financial security of your loved ones now. A general term plan would give only the death benefit but an additional feature i.e. an Accidental Death rider will boost the coverage.

  1. If you are including an accidental death rider in your term insurance plan, then your nominee will receive the additional sum assured along with the death benefit in case of your death due to an accident
  2. This rider is applicable only for accidents and since it is applicable for accidents only the premium for including this rider into the plan is low
  3. In case of the occurrence of death within 3 months of the accident, your nominee will receive the additional sum assured
  4. This is mainly applicable to those individuals who are traveling very frequently.

Critical Illness Rider

Several critical ailments such as cancer, heart attack, paralysis, kidney failure, etc. can be reasons for your financial and emotional trauma. The treatment for these ailments is quite expensive and can drain out all your savings. So, a critical illness rider can be included along with your base term insurance plan for enhanced coverage.

  1. On the diagnosis of any of the critical ailment which is mentioned in your policy document, you will be able to obtain a lump sum in the form of critical illness benefit
  2. A critical illness rider will help you in compensating the loss of income due to suffering from these critical ailments
  3. The rider will be active till the end of the policy tenure and the premium rates for this additional rider will remain the same throughout the policy tenure
  4. Life insurance providers and general insurance providers both offer the critical illness rider
  5. It is advisable to read your policy document carefully to have a clear understanding of which critical ailments are included in the rider

Permanent and Partial Disability Rider

The Permanent and Partial Disability Rider is quite helpful in those cases where you have suffered from some permanent or temporary disability due to an accident. Due to the accident and the disability, your work and income would be affected and your family would face a difficult time. This rider is your back up plan to deal with such difficult situations.

  1. The benefits from this rider can only be availed if you have suffered from a disability due to an accident
  2. Mostly, insurance riders will do the payout in a certain percentage for the upcoming 5 years to 10 years. So, you will have a source of income on which you can rely for some years
  3. In case of permanent disability, you will receive the entire sum assured but for partial disability half of the sum assured is obtained
  4. This rider is mostly availed in combination with the Accidental Death Rider
  5. It is necessary to go through the policy documents to understand the terms and conditions associated with the rider.

Waiver of Premium Rider

When you are paying your premium regularly, your term insurance plan is active. In case, you had an accident and suffer from some disabilities. There is a loss of income and you are unable to pay your term plan premium. The Waiver of Premium rider will help you in such an unprecedented situation.

  1. By this rider, your future premiums are waived out but your policy will remain active. You will also obtain your death benefit according to the terms and conditions of the policy.
  2. You are not worried anymore about the payment of future premiums.
  3. This rider is mostly helpful for those people who lead a lifestyle which is quite risky.

Accelerated Death Benefit Rider

The Accelerated death benefit rider is useful if you are suffering from a terminal illness such as AIDS, Cancer, Leukemia, etc. The medical costs for the treatment of such ailments are very high and it is quite difficult for a common man to afford these treatment facilities. So, an accelerated death benefit rider will be your savior in such a critical situation.

  1. By this rider, you can obtain a partial amount of the sum assured in advance to be spent for your medical treatment.
  2. The remaining portion of the sum assured will be obtained by your nominee after your demise.
  3. So, this rider is helpful when you are alive and even helpful to your family when you will not be with them anymore.

Income Benefit Rider

If you are the sole earning member of your family, then what about your family’s income after you pass away. The Income Benefit Rider will be helpful to you in such a situation.

  1. Along with the sum assured, your family will receive a certain percentage of the sum assured as a monthly income
  2. This monthly income can be obtained by your family members for around the upcoming 5-10 years which would be sufficient to find out other means of income and settle down financially.

Hence, term insurance policy riders are important but they are effective only when selected wisely. So, you should first understand your requirements, compare the policies with riders online and then select the most suitable ones. Moreover, you should also carefully study the policy document to understand the various terms and conditions associated with the term insurance policy riders.

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