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Term Insurance Riders
Riders provide additional coverage
Cover for Permanent & Partial Disability
Offer lump sum amount if insured diagnosed with critical illness
Enhanced sum assured
A rider in a Term Insurance is an extra coverage that an insured can avail along with the base coverage offered by a particular policy to enhance protection. An insurance policy holder can avail riders on a term insurance by paying an added amount of premium.
As we know, Term insurance is a type of life insurance that presents the nominee of the insured with a death benefit in case the insured dies during the term of the policy. The availability of Term Insurance Riders depends on different insurance companies. Different insurers offer different add-ons or riders along with their Term Insurance plans to suit the requirement of their clients.
Riders are not compulsory; however, they are recommended to be included in a policy because they offer extra coverage to protect you and your dependents against the uncertainties of life. With the help of riders, a term insurance policy owner can enjoy multiple benefits out of a single term plan.
Further, most people think that riders are costly as it is a common notion that riders will add an exorbitant amount to your premium payment. However, the fact is, term insurance riders can make your policy cost-effective if chosen efficiently. Let's learn more about the term rider meaning in insurance below.
Types of Term Insurance Riders
Generally, term plans are available with riders. These term insurance riders are priced differently and have different terms and conditions. Below is a list of different term insurance riders:
Rider on Accidental Death benefit
This term insurance rider allows the nominee of the insured to avail extra sum assured in the event of death of the insured in an accident. This extra sum amount is based on the original amount that the insured has opted for the term plan and it might differ as per different insurance companies. The premium rate that the insured needs to pay for this rider stays fixed throughout the policy duration. Some insurers might put a restriction to the higher limit of sum assured that can be availed as part of the rider.
Rider on Accelerated Death Benefit
If the insured person is suffering from a critical illness and a large sum is incurred on the treatment, in that case the family of the insured can seek for a portion of the total sum assured from the insurer in advance under this rider. This way they can use the sum for the treatment of the insured.
Rider on Accidental Disability Benefit
This term insurance rider comes to the aid of the insured in case he/she suffers from complete or partial disability caused in an accident. Most plans pay for 5 years to 10 years to the disabled insured person under this rider and aids as a source of income for the family.
Rider on Critical Illness Benefit
Here again, the insured is allowed a lump sum amount if he/she is diagnosed by a critical illness enlisted in the policy document. Some common critical illnesses covered by term policies include:
- Cancer
- Stroke
- Paralysis
- Kidney failure
- Heart attack
- Major organ transplant, etc.
Once you receive the amount, you can terminate or continue the policy depending on the terms and conditions of the policy.
Premium Waiver Rider
Under this term rider life insurance, the future premium gets waved off if the policy owner is unable to pay further premiums because of income loss or any disability. Thus, the premium payment will continue without your contribution until the policy expires. Without this rider, if the insured stops paying the premium due to any reason, the policy might expire and the death benefit to the nominee will not be paid.
Rider on Income Benefit
This rider can be purchased by making an extra premium payment while purchasing the term policy. This again serves as a source of income if the insured dies suddenly where the family of the insured can avail added source of income each year together with the regular sum assured for over 5 years to 10 years time.
Rider on Child Support Benefit
This rider is significant and should be included along with the base term policy. This rider allows an additional benefit of sum assured in the event of the death of the insured. This rider takes care of the child’s needs after the demise of a parent and ensures that the child could reach each life milestone without having to compromise on life goals due to monetary constraints.
Benefits of Term Insurance Riders
Riders offer numerous benefits along with offering greater coverage to the basic term plan as stated below:
Improved Sum Assured
with term insurance riders, you can improve the total coverage amount that your nominee might receive as compensation. For example, if you buy a term plan with base coverage amount as 50 lakh and buy a rider of 25 lakh, then the total coverage received gets enhanced.
Family gets more protection
riders allow family members of the insured to receive greater monetary protection if the insured dies suddenly. This way, they can take care of their needs better. Also some riders not just protect the family, but they also protect the insured in case of his/her complete or partial disability or in case of critical illnesses.
Easily affordable
the term insurance riders are viable options as they offer enough benefits at reasonable premium prices. Thus, it is better to buy riders as compared to buying different policies for different things like accidents, critical illness etc. This way the insured can pay less and at the same time they don't have to manage multiple policies at one time.
Improved Sum Assured
with term insurance riders, you can improve the total coverage amount that your nominee might receive as compensation. For example, if you buy a term plan with base coverage amount as 50 lakh and buy a rider of 25 lakh, then the total coverage received gets enhanced.
Family gets more protection
riders allow family members of the insured to receive greater monetary protection if the insured dies suddenly. This way, they can take care of their needs better. Also some riders not just protect the family, but they also protect the insured in case of his/her complete or partial disability or in case of critical illnesses.
sEasily affordable
the term insurance riders are viable options as they offer enough benefits at reasonable premium prices. Thus, it is better to buy riders as compared to buying different policies for different things like accidents, critical illness etc. This way the insured can pay less and at the same time they don't have to manage multiple policies at one time.
Review Sum Insured
Renewal is also the time to review the insured sum of your health insurance plan as per your needs so that you can enhance cover if you want to or opt for any add-on if required.
Why To Buy Term Insurance Riders?
Getting term insurance to secure your family financially is important so that their needs can be fulfilled even when you are not there. Term insurance with riders allows you to ensure further support to ensure that the family lives in comfort. So, buying riders with your term insurance is a viable option as you don't know about the uncertainties of life.
Here are some key reasons to buy term insurance riders:
Can avoid multiple policies
by buying rider in term insurance, you can avoid the use of multiple policies for different purposes like accidents, critical illness etc. As such, despite how high the sum assured of your term plan is, they do not offer any added coverage besides death benefit. Thus buying riders allows you to have extra coverage on accidents, disability and illnesses. So, rather than buying different plans for different needs, you can buy riders to fulfill all your needs.
Saves money
since with riders you can avoid buying multiple plans, thus you get to save money on different plans. However, you can get the required benefit at a lower cost with the help of riders.
Extra support
term plans offer financial support to the loved ones after the insured leaves the world forever. So, the insured would like to ensure that the family members get whatever they need to survive better after he/she is gone. With riders, you can get extra support to the family when they need it the most.
Tax deduction
this is again a benefit received from buying term insurance policy as you get tax exemption on the premium of term insurance as per section 80C of Income Tax. Riders are also taken into consideration for such tax benefits.
Can avoid multiple policies
by buying rider in term insurance, you can avoid the use of multiple policies for different purposes like accidents, critical illness etc. As such, despite how high the sum assured of your term plan is, they do not offer any added coverage besides death benefit. Thus buying riders allows you to have extra coverage on accidents, disability and illnesses. So, rather than buying different plans for different needs, you can buy riders to fulfill all your needs.
Saves money
since with riders you can avoid buying multiple plans, thus you get to save money on different plans. However, you can get the required benefit at a lower cost with the help of riders.
Extra support
term plans offer financial support to the loved ones after the insured leaves the world forever. So, the insured would like to ensure that the family members get whatever they need to survive better after he/she is gone. With riders, you can get extra support to the family when they need it the most.
Tax deduction
this is again a benefit received from buying term insurance policy as you get tax exemption on the premium of term insurance as per section 80C of Income Tax. Riders are also taken into consideration for such tax benefits.
Wrapping Up
To wrap it up, now you know what is a term rider? However, there are a few things to remember about term insurance riders before you choose one such rider to add to your policy. You must note that riders are optional and have conditions that need to be evaluated. They are useful tools to ensure further protection to insured and nominees. You pay a less premium for riders as compared to premium for base policy. Thus, it is suggested to get detailed knowledge about what is rider in term insurance along with the benefits, the inclusions/exclusions etc. of term riders before buying them.
