No, not all term insurance policies allow riders. You must first check with your insurance provider to see which riders are available under the product.
Riders in Term Insurance Plan in India
Life is an uncertain journey in which you cannot predict the next step. However, you can always plan for what happens to your loved ones in your absence by having a safety net to protect them from any financial tragedy. This is where a term insurance policy comes into play.
However, a basic term insurance policy may not be sufficient to take care of your family’s needs after your unfortunate demise. So, it’s highly advised that you purchase term insurance riders, the add-on benefits, along with a basic term insurance policy to enhance its coverage and help you ride smoothly over any unforeseen circumstances.
In this article, we will explain the benefits and the different types of riders in term insurance.
What are Term Insurance Riders?
Imagine you bought a new phone you love to use, but you’re worried that if you accidentally drop it, the phone might break or get damaged. So, you get a phone cover to keep your phone safe. This is like a basic insurance policy.
Later, you also decide to protect the screen with an additional screen guard to provide extra protection. This additional cover is like a term insurance rider that will provide additional benefit to your family in any situation.
So, while a basic term insurance policy will offer death benefits to the policyholder, adding term insurance riders will enhance the policy’s coverage by providing you additional benefits.
Term insurance riders provide flexibility in terms of the premium amount and duration of the policy as the amount of these riders are added to the base premium of the term insurance policy. Therefore, opting for riders increases the policy’s coverage while simultaneously allowing you to customise it per your needs.
What are the Different Types of Term Insurance Riders?
1. Accidental Death Benefit Rider
Accidents are unpredictable, and anyone can be a victim of it. So, in such financially traumatic situations, this rider pays the supplementary sum assured to the beneficiary in case of the policyholder’s untimely death due to an accident. The sum assured is paid within 120-180 days from the date of the accident. However, the rider does not provide benefit in case of death due to suicide, self-inflicted injuries, substance abuse/overdose, and participation in riots or rebellion.
Who should opt for it?
Individuals prone to higher life risks, such as construction and mine workers or those who travel frequently.
2. Accidental Total and Permanent Disability Rider
This type of term insurance rider will bear the financial burden of your loved ones if the policyholder suffers from permanent or partial disability due to an unfortunate accident and lose the ability to earn a living. The rider provides you with a full or partial sum assured depending on the degree of disability as a lump sum. The option to get payout in instalments is available depending upon your insurer.
Who should opt for it?
Individuals who commute daily, travel frequently, or work in high-risk jobs such as construction sites, mining sites or a manufacturing factory.
3. Critical Illness Rider
This rider protects financially if the policyholder has been diagnosed with one of the critical illnesses pre-specified in the rider and covers the high medical costs of the treatment, up to the amount of rider chosen.
It compensates the loss of earnings with a lump sum amount. The rider is active till the term insurance policy duration although its benefits can be claimed only once.
Who should opt for it?
Individuals with a family history of serious health conditions or those who are the sole breadwinners of their family.
4. Terminal Illness Rider
If you have purchased the Terminal Illness Rider in your policy and are later diagnosed with a terminal illness wherein short life expectancy is medically confirmed, then this rider provides you with a part of the sum assured to pay for the medical expenses of the illness. The remaining amount is paid to the family after you pass away.
It is a low-cost rider that helps your family during your last days and after you pass away.
Who should opt for it?
If you have dependents relying on you for financial support, limited savings, or if you think your health insurance coverage might not be able to cover all the costs incurred due to terminal illness.
5. Waiver of Premium Rider
This type of rider in term insurance waves off the future premiums to provide financial respite to the policyholder who may be suffering from a disability or loss of income and cannot pay future premiums.
This ensures that the policy continues till maturity even in case of non-payment of premium, thus reducing your financial worries.
However, this term insurance rider can only be availed of if the policyholder has been disabled for six months or more or has been diagnosed with any life-threatening illnesses.
Who should opt for it?
People who are more at risk of getting injured or falling ill or have dependents, and parents with dependent children.
Why Should You Purchase Riders in Term Insurance?
More EconomicalTerm insurance riders are an economical way to enhance the policy's coverage. By paying a minimal additional premium, a rider can get additional significant benefits and provide support in situations where additional funds might be needed.
Comprehensive ProtectionTerm insurance riders provide enhanced protection to families when faced with financial turmoil such as accidental death, terminal illness, permanent disability, etc. Choosing the appropriate term riders can cover the medical expenses and provide the death benefit to support the family.
Customizable CoverageThe policyholder can customise the term plan riders as per their needs and requirements to provide the most comprehensive coverage within their budget.
Easy ManagementBy purchasing the best term insurance plan with riders, policyholders no longer require multiple insurance policies to get adequate coverage for their loved ones. Opting for a rider is better than purchasing an entirely new insurance policy. It will become more manageable than keeping a tab of multiple-term insurance policies.
Peace of MindWith comprehensive coverage and improved benefits, term insurance riders offer peace of mind as the policyholder and their family are financially protected against unforeseen events.
How to Choose the Best Term Insurance Plan with Riders?
Assess Your NeedsTo choose the best rider in term insurance, determine your financial needs and goals first. Assess your age, health, and present and long-term financial situation to choose a rider that meets all your needs.
Research and CompareDo your market research to know the different types of riders available in term insurance, including their benefits and premium charges. Then compare the best term insurance plan with riders from reputable companies to choose the one that is in your budget and best aligns with your requirements.
Reach Out to ExpertsApproach a professional expert in term insurance to guide you to the best term insurance policy. Such an expert will evaluate your needs and explain the pros and cons of different riders to offer advice on a term plan with riders that is personalised for your needs.
Read the Policy Document CarefullyBefore finally purchasing an insurance policy, read the policy document carefully for both the base term insurance policy and the rider(s) so that you don’t overlook any terms and conditions, exclusions, and inclusions of the policy that may bother you at the time of claims.
Things to Remember Before Buying a Term Plan with Riders
Note down these key things to note about term insurance rider life insurance before you add one to your basic term policy:
- You can choose term insurance riders to customise your policy.
- Check the terms and conditions associated with different term plan riders before adding them to the base policy.
- You can add the term plan riders when you buy the policy, while some insurance companies allow you to add riders at the time of policy renewal.
- Also, you can add the rider for less or same duration as the base policy but cannot exceed it.
Therefore, buying term riders for an insurance policy is entirely your choice. Purchasing a rider would be highly beneficial if you want enhanced coverage over your base term insurance policy with the same insurance company.
FAQs about Term Insurance Riders
The premium cost of term riders depends on the type of rider and the coverage amount. It will be added to your basic policy premium.
Term insurance riders may have a specific duration or may be valid for the entire policy term. You must check such details with your insurance provider before purchasing one.
Generally, you can add a term rider to your policy at the time of purchasing it, but you may also add it at the time of renewal.
Yes, you can terminate the term insurance riders at any time. However, the payout at the time of maturity depends on the terms and conditions of the rider.
Other Important Articles Related to Term Insurance
- This is an informative article provided on 'as is' basis for awareness purpose only and not intended as a professional advice. The content of the article is derived from various open sources across the Internet. Digit Life Insurance is not promoting or recommending any aspect in the article or its correctness. Please verify the information and your requirement before taking any decisions.
- All the figures reflected in the article are for illustrative purposes. The premium for Coverage that one buys depends on various factors including customer requirements, eligibility, age, demography, insurance provider, product, coverage amount, term and other factors
- Tax Benefits, if applicable depend on the Tax Regime opted by the individual and the applicable tax provision. Please consult your Tax consultant before making any decision.