Accidental Death Benefit Rider And Its Benefits!
Published On Feb 06, 2022 11:52 AM By InsuranceDekho
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Term insurance is without a doubt the most crucial financial planning instrument, particularly for those with dependent family members. A term plan with riders, on the other hand, offers an extra layer of security. If money is a problem, there are various low-cost term insurance policies that provide complete coverage.
Riders are optional supplemental benefits that you may add to your term life insurance plan in addition to normal insurance coverage. They will not only enhance your salary, but also cover other unforeseen events such as accidents, permanent and partial incapacity, catastrophic diseases, and so forth. It is a supplement to your life insurance plan that protects you and your family from accidental death or disability. It functions as a double compensation rider, compensating both the life insurance policy amount and the cost of the driver in the event of an accident fatality. To understand and find out more on accidental death benefit rider, read on.
What Is The Significance Of Accidental Death Benefit Rider?
This rider addresses a clear and irreparable loss - a person's death. As a result, their family experiences both mental and financial hardship. Medical expenses are well out of range, and if the illness becomes deadly, the family will also have to cope with the loss of a loved one and lost future wages. The addition of an accidental death benefit rider aims to minimise the financial impact of the breadwinner's death, which comes with both medical bills and a permanent loss of income.
What’s The Work Of An Accidental Death Benefit Rider Work?
An accidental death benefit rider, in most situations, would provide a lump sum amount to an insured individual's family in addition to the death benefit provided by their ordinary life insurance policy. If the insurance company certifies that the insured person's death meets the requirements of the rider, the reimbursement will be made to their loved ones. Adding such protection now, however, may save their family from wanting to cope with significant, unexpected expenditures later.
What Are The Benefits Of Accidental Death Benefit Rider?
Following are the benefits of opting for an accidental death benefit rider -
1. Adds A Protective Layer
The accidental death benefit rider provides an additional layer of financial compensation to an insured person's life and their family against life's unforeseen events. The family of the participant will get a rider benefit amount in addition to the death benefit under the term insurance policy in the case of the respective individual's uncertain death due to an accident. This rider can give financial stability to the life assured's family in the event of the life assured's death. The rider benefit provided under this rider can operate as a buffer, allowing the family to cover urgent costs, everyday expenditures, preserve their lifestyle, and attain their goals.
2. Regular Payouts
The accidental death benefit rider allows the rider benefit amount to be paid as a lump sum or in regular instalments, which could provide a regular income for the insured individual's family. The nominee can choose the payment method that best meets their monetary needs and circumstances. The rider benefit is granted in one lump amount together with the death benefit if the nominee chooses lump payment; if the nominee prefers regular instalments, the rider payment will be made in equal instalments over a set period of time including the death benefit.
3. Tax Rebates
Premiums put forward towards a term insurance policy and riders are eligible for a tax credit. An insured individual can claim tax reimbursements of up to Rs. 1,50,000 lakh under Sections 80C and 10(10D) of the Income Tax Act, 1961. If the premium payment does not exceed 10% of the sum promised. Considering premiums paid for the rider eligible for taxable exemptions under Section 80D of the Income Tax Act of 1961, the accidental death benefit rider gives a two-fold tax benefit to the life assured.
The value of an accidental death benefit rider is obvious, and given the small additional cost of a rider, adding it to your entire life insurance policy makes total sense in the long run. Even in the face of unplanned and unpleasant occurrences that you manage for your family, it's better to be prepared than sorry.
Also read- What's Better For Me Endowment, Money Back Or ULIP
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.