What is an Accidental Death Benefit Rider in Term Insurance?

What is Term Life Insurance ?

Term Insurance is a type of insurance policy in which the insurer provides coverage of a certain amount to the policyholder for a certain time period or a specified term of years at a fixed rate of payments. In any unfortunate event if something happens to the policyholder then the benefit will go the policyholder family. It is basically a safety net one should have for his family when in case he is not around.

When planning to buy a term life insurance policy, it is often observed most of the people fail to understand the various elements that make a life insurance cover and end up buying the wrong product. No one can deny the fact that life insurance remains the most important financial planning tool for every individual who has dependent family members. Hence when planning to buy life insurance it becomes the most important factor to research and consider all the elements and keeping all the scenarios in mind. Apart from deciding the right sum assured needed, you should also calculate the policy term and the add-ons to be purchased to make the term insurance policy more comprehensive. As per the policy conditions, the entire sum assured is paid out to the nominee/dependents of the policyholder in case of the sudden death within the policy term that maybe 20.30, 40, or more years.

Making the Policy more Comprehensive

In order to make the Term life Insurance more comprehensive, the insurers allow the policyholder to attach add one or riders to the plan. These Add-ons help the policyholder to enhance the amount of the cover and make sure that his dependents get the maximum benefits on his death so that they don’t suffer from any financial problems. The various riders available promises additional coverage to the policyholder in case of various segments that include, Death, Disability, and Disease. In order to get the additional coverage the policyholder will have to pay an extra amount of premium to attach the add-ons to his policy. It is really important to attach the right add-ons, hence you must choose the correct add-ons which can cater to your need and specific requirements.

Accidental Death Benefit Rider

It is a provision of Term life insurance policy wherein the insurance company will provide an additional benefit to your nominee if your death occurs due to an accident, usually double the amount of sum assured.

People who are involved in a profession that involves greater risk to their lives and involves a lot of driving must make their term plan more comprehensive by adding Accidental Death Benefit Rider to it. It is the most common rider that almost every term insurance company provides it. By opting for this rider, the policyholder gets the amount in lump sum or as a monthly income whichever way the policyholder thinks is best for his family. The premium of the policy completely depends on the sum assured.

Accidental death benefit rider generally covers the death by accident. It typically excludes incidents like acts of war and death caused by illegal activities, Hazardous hobbies, etc.

This rider safeguards the family from accidents/mishaps resulting in death which can impair the family’s income for months or even years. Hence one should always keep this add-on into consideration whilst investing in a term insurance policy.