Understanding Riders in Term Insurance: Which Ones To Choose?

Life is unpredictable. The effects of a loss of life in a family not only affect the demised person, but the family members also suffer tremendous emotional and financial crunches, especially when the demised was the principal breadwinner.  

Considering such unpredictability, the insurance companies have launched term life plans. This is essentially a life cover plan, exclusively crafted to sustain the family members after the policyholder’s demise.  

The coverage is offered for a pre-defined period in exchange for a pre-determined premium already paid. The beneficiaries receive the death benefit if the policyholder passes away during the plan tenure. However, if the policyholder and the insured individual are different and the insured person passes away, the insurer provides no benefit.  

This is a pure life coverage plan, i.e., it does not offer any investment or savings benefit. If the insured outlives the plan tenure, then also he/she will receive any benefit from this.  

However, you can enhance the protection span by adding befitting riders to the base plan.  

What are term insurance riders? 

This is a typical optional benefit that the insured individual can avail of to make the base plan more comprehensive. A term insurance rider is an additional add-on which optimises the overall benefits of the base plan. This gets activated only after a specific event has occurred.  

The term insurance rider benefits are absolutely optional. It aids in customising the principal plan up to a certain extent.  

List of common riders in term insurance 

The overall coverage span of term life can be extended according to your convenience by adding add-ons to the basic plan. Some of the popular term insurance riders include the following: 

1. Accidental Death Rider:  

Observing the increasing number of accidents, it has become almost imperative to ensure protection against such unforeseen circumstances. A standard term plan offers death benefits, but in an accidental death scenario, this rider enhances the insurance coverage. So, by choosing this rider, the family members of the concerned policyholder receive accidental death benefits apart from the sum assured protection of the base plan. 

2. Critical Illness Rider:  

This rider has been specifically crafted to allow coverage on detection of any listed critical ailment like cancer, cardiovascular diseases, cardiac arrest, coma, etc. Treating such issues can obliterate your savings fast. So, attaching this rider to your base plan can save you from such rainy days. You will receive a lump sum benefit from your insurer on diagnosis of any of the listed critical ailments as followed by your insurer. Moreover, it also acts as an income substitute as you become unfit to work due to your ailment. 

3. Permanent and partial disability rider:  

This rider has been designed to cover the loss of temporary or permanent disability caused by an accident. This proves to be essentially helpful during such tough times as it copes with both the high treatment costs and income loss. Depending on the level of disability, either the sum assured or a percentage of it is paid to the insured. However, several insurers often waive future premium dues under such circumstances without plan discontinuation.  

4. Premium waiver rider:  

With this rider, your future premium dues get waived, keeping your plan active, especially during accidents or disabilities leading to income loss. Depending on the terms of your chosen plan, the death benefit is also offered. This rider helps you to retain your peace of mind despite challenging unprecedented circumstances.  

5. Accelerated death benefit rider:  

This has been crafted to cover losses caused by terminal ailments like leukaemia, cancer, etc. Under this rider, the insurer usually offers 50% of the amount of the sum assured on detection of any listed terminal ailment while the remaining 50% is paid as a death benefit to the nominee after the demise of the insured.  

6. Income benefit rider:  

If you go by the name, you can understand that the term insurance rider acts as a way of income substitution during any unfortunate event. This proves to be a saviour, especially if the insured person happens to be the sole breadwinner in the family. It happens to efficiently manage the financial distress caused due to such unfortunate events.  

Wrapping it up 

Author Bio

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 21 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.

Choose from India’s top insurers

Latest Post

Health insurance plans are purchased with the hope of medical protection in times of need. However, sometimes it ends up being a source of surprise and disappointment. This mostly happens when people rush to buy health insurance plans, often overlooking essential aspects. Ignoring waiting period clauses, misunderstanding exclusions, and being unaware of sub-limits can lead to unwanted problems in the future.

 

See nowSee now

Term insurance is an important investment. However, with the availability of so many insurers offering term plans, it becomes difficult to select the best term plan to suit your needs. Buying a term plan needs some consideration and research on the part of the policyholder. In this post, let us discuss the best term insurance providers in India.

See nowSee now

If you think of life insurance, chances are you are picturing something people buy in their 30s or 40s. But what if you are 65 or older and just getting started? The good news is that you are never too late. Whether you are thinking of easing the financial burden on your family, covering final expenses, or simply leaving behind a legacy, there are life insurance options tailored just for you. 

This article will be a guide to life insurance for senior citizens above 65 years, explaining why it is important, the type of insurance options, and how to get the right policy for you. 
 

See nowSee now

As any parent will tell you, kids come with two things: endless energy and absolutely no sense of self-preservation. From scaling chairs and tables like mountaineers to catching germs within a five-mile radius, kids really know how to keep everyone on their toes. Now, it is understandable you are worried. As much as we would love to wrap our small ones in cotton wool and keep them safe forever, real life has other plans.  

See nowSee now

It is very important to know the car insurance cost in India so that you can find the affordable policy that you are looking for in this case.

See nowSee now