Term insurance is a protection only insurance plan that provides financial protection to the family of the insured. It is a basic plan that offers only death benefit. Read on to know more about the term insurance riders and how you can increase the coverage.
A lot of life insurance buyers, especially the first-time buyers, often complain that their term life policy cover is insufficient to suit the need of the family. However, not many people know that they can easily extend the coverage of their term plan by buying riders. A term insurance rider is essentially an extension, attachment or amendment made in the original policy to accommodate supplementary or additional coverage.
The riders enhance the coverage of the term policy and provide you additional benefits, apart from the core benefit, which is providing a death benefit. Today, most insurance companies in India allow the term insurance policyholders to choose different riders to suit their specific needs.
However, you must know that when you buy term insurance riders, you must pay an additional premium to get the benefit of the rider. If you want to buy a rider, it is paramount that you check with the insurance agent or the insurance company about the type of riders available. Typically, most insurance companies offer the following riders for term insurance policyholders.
Accidental Death Benefit Rider
While the policy is active, if you meet with an unfortunate event that leads to your death, it can significantly affect the financial future of your family members. To protect your family from this situation, it is better to have an accidental death benefit rider. With this rider, your family will receive an additional sum assured, apart from the death benefit guaranteed by the original policy. The insurance companies calculate the percentage of the additional sum assured based on the initial sum assured and it usually varies from one insurer to the other. The accidental death benefit rider is highly recommended if you work in a high-pressure environment or if you frequently travel for business.
Critical Illness Rider
As the name suggests, the critical illness rider provides coverage against life-threatening diseases like cancer, paralysis, stroke, kidney failure, etc. While buying this rider, you must check with the insurance company for the various illnesses covered under it.
Premium Waiver Rider
This is one of the most popular term life insurance riders. If you are unable to pay the premium due to loss of income or disability, the insurance company waives off the future premiums till the end of the policy term and yet you will be eligible to receive the benefit of the policy .
Income Benefit Rider
This is one of the best and useful riders. It helps provide income to your family members post your demise. If you have this term insurance rider, the insurance company, apart from the sum assured, will pay an additional income to your family every year for five to 10 years as specified in the contract.
Accelerated Death Benefit Rider
Today, in the purview of the rising cost of the medical expenses, this is one of the must-have types of riders in insurance. The accelerated death benefit rider gets activated if you are diagnosed with any critical illness. The sum assured received can help you and family members to meet the cost of your treatment.
With so many rider options available for term insurance, you can buy term insurance rider to suit your needs. However, before you buy, it is important that you read the terms and conditions of the riders well to understand the inclusions and exclusions and make an informed purchase decision.
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