A term rider is an additional benefit that you may include with your term insurance policy. A term policy is pure life cover that is available at an affordable premium. Including riders allows you to procure higher coverage and ensure additional protection.
Some facts about term plan riders
- Riders are available only with a life insurance policy
- These are beneficial in case of an untoward event
- The cost to include riders is lower than the policy premium
- The benefits available under the riders are generally lesser than the basic sum insured
Life is full of unforeseen situations you are never able to predict what happens the next moment. A regular term plan offers only death benefits to the beneficiaries in case of your demise. To increase the benefits of term insurance, here are six riders you may consider including in the policy.
- Accidental death rider
The number of accidental deaths has been increasing over the years. An accidental death rider provides additional benefits in case you pass away in an accident. The rider is recommended if you travel frequently or work in hazardous conditions. The additional premium for this rider in term insurance is fixed for the policy duration.
- Permanent or partial disability rider
If you are disabled due to an accident making you incapable to work, this rider comes in handy. In this situation, the insurance pays the disability benefits that will enable you to meet your expenses. You may also opt to receive the payout in periodic installments; however, you must check the terms and conditions because these differ for every insurer.
- Critical illness rider
The fast-paced lives and unhealthy lifestyle has increased the risk of critical illnesses, such as cardiac arrest, cancer, and kidney failure. The treatment for such conditions lasts for longer periods and is expensive. Critical illness riders in term insurance pay a lump sum in case you are diagnosed with a critical condition.
- Premium waiver rider
If you are unable to continue working due to a disability, you may be unable to pay the premium on your term plan. If you do not pay the premium, the policy lapses and you do not get any benefits. However, if you include this rider, the premium is waived in case of your disability without the policy benefits lapsing.
- Income benefit rider
If you are the sole earning member in your family, have you considered what will happen to your survivors in case of your untimely demise? In your absence, the income benefit rider provides additional income over a pre-defined period to your beneficiaries along with the sum assured.
- Accelerated death benefit rider
In case you are diagnosed with a terminal illness, the treatment costs would be substantially high and your family may not have the funds for it. If you avail of the accelerated death benefit rider, the insurance company pays a portion of the sum assured at the time of diagnosis. If your condition may result in your demise within one year, the partial payout may be used for your treatment. The balance sum assured is paid to your beneficiaries on your passing away. This rider is available at a nominal premium. It is recommended to include it to provide financial support to your family during your terminal illness.
Before you decide the best term insurance plan and the riders to be included, it is recommended you take the time to understand and research the different options. You must clearly understand the inclusions and exclusions and the costs of the various riders. Most importantly, you must include only those riders that meet your requirements.