Add-on riders in term life insurance policies
Term insurance supports the family financially in case of the unfortunate death of a key earning member. Are you aware of the riders available with term plans? Let’s find out.
Before talking about term insurance riders, let us first understand the meaning of term insurance. Term insurance is a type of life insurance that pays benefits in terms of money to the nominee or the insured’s family after the death of the policyholder.
Term insurance is one of the best ways to protect the lives of your loved ones. Term insurance can also be availed through several riders that can be purchased with the policy. You can pay a little extra premium to get the most suitable riders which can further boost the strength of your policy. This way, you can ensure that your family can cope with various situations that may arise in the event of your unfortunate death. You can choose riders as per your budget so that you can easily pay the premium annually.
However, to choose the best rider, you must have a thorough understanding of it. In this post we are giving you detailed information about various Term life insurance Riders and the way they operate.
What are Term Insurance Riders?
Term insurance riders are additional covers or add-ons that are offered with term insurance policies to enhance their coverage.
5 Popular Types of Term Insurance Riders
Below are some of the best term insurance riders or add-ons that you can avail with your plan:
1. Accidental death benefit rider – Under the accidental death benefit rider, if the policyholder dies due to an accident, the policyholder’s nominee gets the additional sum assured. Without this rider, the nominee is entitled to receive only the principal sum assured even if the insured person dies in an accident. However, if the insured buys this rider along with his/her term insurance policy, they can guarantee that their nominee will receive an additional amount as accident benefit along with the base amount.
Hence, this life insurance policy rider covers the insured’s family with additional financial support in case of accidental death of the policyholder.
For example, a policyholder buys a term plan with Rs 1 crore as sum assured. He/she buys a contingency rider of an additional 50 lakhs. In this case, if the policyholder dies in an accident, his/her family will get INR 1 crore and INR 50 lakh from the insurance company. However, if he/she dies due to any other circumstances, the family will get the benefit of the sum assured of Rs 1 crore and not the accidental rider benefit of Rs 50 lakh.
2. Accidental Disability Benefit rider – Under the Disability Benefit Rider, the policyholder gets financial assistance from the insurance company by getting this add-on with their term plan while purchasing the policy. Thus, this life insurance with disability rider helps the insured person in the event of an accident that disables the person with temporary or permanent disability. So, here the insurer will pay the insured regularly for the next 5 or 10 years depending on the percentage of the sum assured of the policy.
For instance, if the policyholder becomes unable to work due to an accident or any other mishap, the insurance company will pay 10% of the sum assured annually for 10 years. This money can be used as a regular source of income to support the insured and his/her family.
3. Critical illness benefit rider – Under this life insurance rider, the policyholder is entitled to a lump sum if he/she is diagnosed with a critical illness as specified in the policy terms. Some of the major critical illnesses covered under critical illness riders include cancer, renal failure, stroke, heart attack and paralysis etc.
Hence, if the insured is diagnosed with a major illness, the insurer will pay the sum assured as a lump sum. However, in this case, the term plan can either be canceled or continued depending on the policy clause. It is important to carefully read the critical illness rider policy clause in life insurance to ensure that it provides you with benefits as per your needs.
4. Premium Waiver Rider – This waiver of premium rider life insurance confirms that the term plan is not canceled even if the insured is unable to pay future premiums. This rider can be availed in case the insured suffers a loss of income or the person is unable to pay the premium for any other reason. If the insured faces such a situation, he/she can seek waiver of premium for future payments. However, the best part is that the scheme still works as usual.
So, by availing this rider you can ensure that all premiums are waived till the policy expires. Conversely, without this rider you will not be able to continue your policy if you are unable to pay the premium on time.
5. Income Benefit Rider – Under this life insurance rider, The nominee of the insured gets annual additional income for 5 to 10 years along with the sum assured. This rider is a part of many types of insurance plans and helps the insured’s family with extra money for several years after the insured’s death. For example, the policyholder’s nominee may receive 10% of the sum assured as regular income for the next 5 or 10 years, depending on the terms of the policy.
Read more: Reasons to add riders to your term insurance policy
conclusion
You have learned about some of the best life insurance riders and their benefits as mentioned above. However, it is important to fully understand the features of riders and the benefits they offer before purchasing them.
Thus, we hope the above information will benefit you as an insurance seeker to gain understanding and make intelligent decisions while including such riders in your term plan.
Additionally, other riders are also available which include life insurance long term health care rider and single premium life insurance with long term care rider which can also avail additional benefits.
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