Accidental Disability Benefit Rider in Term Insurance – A Detailed Guide


6 min read

Mishap can happen to anyone, anytime, anywhere. We cannot foresee one but can definitely prepare ourselves for such unpredictable and unfortunate events like accidents. Term insurance helps you with just that – offering financial security in case the insured suffers physical disability during an accident. This blog talks all about the Accidental Disability Benefit Rider in Term Insurance plans.

Life is unpredictable and so life is all about preparing for those unseen, unknown uncertainties. We don’t know what may happen the next moment so it only makes sense to be prepared for the worst. This is what term insurance helps us with. This life insurance policy provides financial coverage against the unfortunate event of death of the life assured.

However, sometimes death may not be the only outcome of an unpredictable mishap, say an accident. It may cause temporary or permanent disability of the affected. In this case, if the affected is also the life assured under a term insurance plan, the insurance company can help provide them additional coverage by offering an extra feature by the name of Accidental Disability Insurance Benefit Rider.

What is Term Insurance Accidental Disability Benefit Rider?

This rider can be purchased in conjunction with the base term insurance policy. It helps extend the insurance coverage of the plan for the life assured. As mentioned above, in case the policyholder suffers any form of disability in the event of an accident, this rider would help provide financial coverage to them and their family during these difficult times.

Note that the rider benefit is also meant to cover total and permanent disability of the life assured in the event of an accident. This would include loss of one or both arms or legs, loss of eyesight, and the like. In such cases, the affected would inevitably suffer loss of income causing a huge financial strain on the family.

It is then that the Accidental Disability Rider comes into force, providing assistance to the family members of the life assured by offering a lump sum amount to cover the costs of the treatment as well as other financial liabilities. The rider also provides the flexibility to the insured to receive this monetary benefit either in a lump sum or in installments every month.

What does rider in a life insurance policy mean?

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Who Can Buy an Accidental Disability Benefit Rider?

Since this rider is an add-on benefit provided by your insurer over and above the base term insurance plan that you have already purchased, it can be easily bought by the policyholder (the insured covered under the term insurance policy).

However, it is worth noting here that in order to avail the benefit of the Accidental Disability Rider, the minimum age to enter the term insurance plan is 18 years and the maximum entry age is 65 years. The sum assured and the coverage period under the rider are both the same as those promised in the base term insurance policy. Also, the premium payable remains the same throughout the term of the insurance policy. However, the policyholder has a flexible choice to pay the premium either as a single lump sum amount or on a monthly, quarterly, half-yearly, or annual basis.

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Benefits of Buying the Accidental Disability Rider with Your Base Term Insurance Plan

Since the rider is an add-on, meaning it needs to be purchased separately with your base term insurance policy, most policyholders opt out of buying one. However, this benefit can prove to be quite useful in future, especially in the case of any unpredictable circumstances. Here are some top benefits of buying the rider in conjunction with your term insurance policy:

  1. Covers loss of income: In case of temporary or permanent disability due to accident, the life assured under this rider benefit is promised a monetary benefit by the insurer. This helps cover the loss of income suffered by the insured and their family in such an event (due to inability to work). Under the plan, the policyholder can also opt for monthly payouts as monetary benefit, which would assure a fixed income to them every month and help cover all financial expenses.
  2. Covers cost of treatment: Owing to inability to work, the life assured under the term insurance policy may not be able to shell out money to pay the huge costs for the treatment of their disability. By purchasing this add-on rider, the policyholder can be rest assured of receiving complete financial protection for themselves and their family.
  3. Provides higher coverage at lower premium rates: By buying the Accidental Disability Rider, the life assured promises extended coverage for themselves under the already purchased term insurance plan. Besides, the premium payable for this rider benefit is also quite nominal and can easily be afforded by the insured.
  4. Offers term insurance tax benefit: Sections 80(C) and 10(10D) of the Income Tax Act, 1961 state that the life assured is entitled to double the tax exemption benefits already offered under term insurance, if they buy the Accidental Disability Rider as well. This is basically done to encourage the term insurance policyholder to secure their future by purchasing the additional rider.

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What is Excluded Under the Accidental Disability Benefit Rider?

The rider allows the life assured to enjoy extended term insurance coverage with regard to monetary benefit payout in a lump sum in case of temporary or permanent disability caused due to accident. However, there are certain exclusions as well, which the rider does not cover. Some of these are:

  • The rider fails to provide insurance coverage in case the policyholder suffers disability 6 months after the accident happened.
  • Disability or death caused due to suicide or injuries voluntarily inficted upon onself are excluded from the rider benefit.
  • In case the policyholder voluntarily participates in any form of physical violence, such as war, riot, or rebellious activity and suffers physical loss, the rider would not provide protection to the life assured.
  • Coverage is not provided under the rider in cases of alcohol or drug abuse.

To Sum Up

Term insurance is definitely a must-buy to secure the financial future of your loved ones in your absence. By purchasing the Accidental Disability Benefit rider, you extend that financial security to provide a circle of protection around your family in case you suffer an unfortunate disability as a fallout of an accident. This rider would then cover up the income loss resulting in this event. Look for the best term insurance plan in India and don’t forget to extend your insurance coverage under the plan by availing this rider benefit.

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FAQs on Accidental Disability Benefit Rider in Term Insurance

What is accidental disability rider in term insurance?

Accidental disability benefit is an add-on or rider benefit that you can include in your term insurance plan. This means that the insurance company will pay a percentage of the sum assured for a specific tenure if the policyholder is disabled partially/permanently after an accident.

Is disability covered in term insurance?

Accidental total and permanent disability rider benefit:Most insurance companies in India provide this rider as part of any term insurance policy with disability benefits. Here, the subscriber is provided with the benefit if the policyholder is totally and permanently disabled because of an accident.

What is rider benefit in term insurance?

Riders are optional, extra terms that go into effect along with your basic policy, often at an additional cost. Simply put, a rider provides additional coverage and added protection against risks. Insurance riders are effective add-ons you can choose in addition to your life insurance policy at economical rates.

What is not covered in term insurance?

Term insurance plans do not cover death due to self-inflicted wounds. Death due to any critical illness is covered under Term plans. It also includes sexually transmitted disease like HIV/AIDS. If you have an existing illness when purchasing a Term insurance plan, then it is mandatory to disclose it.

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Sep 01, 2022
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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