6 Important Term Insurance Riders and Their Benefits

Term Insurance

Life is unpredictable and full of unexpected events where no one knows how their life journey may come to an end. Unfortunate and unforeseen circumstances can occur at any time. Thus, it is important to have an additional layer of financial security to cope with such situations.

Term insurance is one of the most comprehensive means of financial security to tackle the uncertainties of life. This plan can benefit the beneficiaries in case of the policyholder’s untimely demise. Term insurance benefits the insured financially by securing them against potential life risks at a high sum assured.

To make a term insurance plan more valuable, it is highly recommended that policyholders include a rider in their original term policy. A term insurance rider is an add-on, attachment, or an amendment made in the base/original policy to get additional offer coverage in the event of the policyholder’s unfortunate demise.

Adding riders to your plan helps to get a life cover in situations that are not covered under the insurance plan. Presently, term insurance policyholders can choose different riders as per their specific needs. Having said that, let’s learn the 6 important term insurance ridersand their benefits.

1. Accidental death benefit

Accidental death benefit rider provides an additional sum assured to the beneficiary in the event of the policyholder’s demise due to an accident. This rider is beneficial for families who rely on the policyholder’s income and would be financially affected in such a drastic situation.

The additional sum assured can be used to cover expenses such as funeral costs, outstanding debts, or living costs for the family.

2. Accidental disability rider

An accidental disability rider provides financial protection if the policyholder is rendered partially or permanently disabled due to an accident. Most policies may pay out a certain percentage of the sum assured over a period of 5 to 10 years following the accident, which can provide much-needed financial stability during a difficult time.

It is important to note that this rider only applies if the disability is caused by accident, so it is important to read the policy document carefully to understand the terms and conditions.

3. Critical illness rider

The critical illness rider provides coverage in the event of the diagnosis of a critical illness such as cancer, stroke, heart attack, or kidney failure. If you are diagnosed with a covered critical illness, the insurance company can provide you with a lump sum benefit that can be used to cover the costs of treatment.

4. Accelerated death benefits rider

The accelerated death benefit rider gets activated when the policyholder is diagnosed with any critical illness. The sum assured received can aid your family member to meet the treatment cost. This is one of the most useful term insurance riders to add as the cost of medical expenses is on the rise.

5. Income rider

If an insured person is the family’s sole bread earner and passes away suddenly, the income benefit rider can provide your beneficiaries with an additional income stream post your demise. This rider is particularly beneficial if you have young children or other dependents who rely on your income.

By attaching this rider to your policy plan, the insurance company, apart from the sum assured, may pay an additional income to your family for 5 to 10 years (or as per the specifics mentioned in the contract).

6. Waiver of premium

With this rider, the future premiums can be waived if the policyholder becomes disabled or experiences an income loss. Moreover, this rider is important because it ensures that the policy stays active even if the policyholder is unable to make premium payments.

Without this rider, if the policyholder faces income loss or any disability due to which premiums cannot be paid, the policy may expire, and no death benefit may be paid due to non-payment of due premiums.

To sum up

Term insurance riders are a great financial tool that offers additional benefits to your existing policy. You can choose the right term insurance rider as per your requirements and can plan for your family in advance.

Before adding riders to your term policy, try to understand what each rider offers, the inclusions and exclusions involved, and the costs of different riders provided by various insurance companies.

Also Read: How to Shop for Individual Medical Health Insurance

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