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Important Term Insurance Riders And Benefits Of Purchasing Them

Updated On Sep 10, 2021

In recent years, term insurance has become an integral part of a financial plan. Chronic illnesses have been on the rise in India, and they are currently the major cause of mortality and disability. Furthermore, the Covid-19 outbreak has sparked worldwide alarm, bringing attention to the term insurance benefits that protect you and your family from unanticipated calamities.

Term plans have evolved into more than just protection plans with the numerous variations of these plans to meet your specific insurance needs. Furthermore, a term insurance policy can provide you with low premiums and flexible payment options, making it a viable option for the majority of customers. Another appealing feature of a term plan is the provision to add riders to the policy for a little fee. The numerous riders in term insurance plans are discussed in this article, as well as how they can benefit you.

What are Term Insurance Riders?

Term insurance riders help you get the most out of your coverage. You can consider them as add-ons that give additional coverage for you and your loved ones. This gives you access to additional advantages in addition to your standard coverage. Riders can also be purchased as a stand-alone policy. For example, you can purchase a critical illness policy or add it as a rider to your existing term insurance policy. Most term insurance policies include the option of adding riders. However, depending on your plan, the sum assured, the policyholder's age, the premium amount, and other factors, the types of riders and charges vary from insurer to insurer.

Also read - Term Insurance Plan for All Age Groups

What are the Most Important Term Insurance Riders? 

Here's a list of riders you can add to your term insurance policy now that you've learned what they are.

1. Accidental Death Benefit - Accidental death is defined as death caused completely by accident, without regard to other factors, and reported and proven to the insurer within 90 days after the traumatic incident. The rider provides an additional sum assured to the nominee in the terrible event of death due to an accident during the policy period. The rider may include a limit on the maximum amount of sum assured that can be paid to your loved ones in particular instances.

2. Partial and Permanent Disability Rider - It'll come in handy if you're injured and become temporarily or permanently handicapped in an accident. In most circumstances, the insurance guarantees a specific amount for the following five or ten years. The insurance firm also waives all future premiums on the main insurance policy.

3. Critical Illness Rider - This rider requires you to pay an additional fee in order to be covered if you are diagnosed with any of the critical illnesses listed in the policy document. The sum earned under the rider can be used to cover both medical and home expenses, similar to an income replacement plan. Although rider options cover specific conditions, including cancer, heart attack, and brain tumour, the critical illnesses covered by the policy may differ from one insurer to the next.

4. Waiver of Premium - Even if you are unable to pay your premiums due to loss of employment in an accident or tragedy, it assures that your life insurance coverage remains active. This policy would have the effect of waiving all future premiums while maintaining the coverage's benefits.
Income Rider Benefit - In the event of the policyholder's death or disability, the income benefit rider provides a regular source of income to the family.

What are the Benefits of these Rider Options?

You can get comprehensive coverage by adding a rider to your main insurance policy. A critical illness rider, for example, pays a lump sum amount that can be used to cover housing bills, loan EMIs, and other financial obligations in addition to medical expenses. Purchasing a rider is far less expensive than purchasing a separate insurance policy. Furthermore, there are numerous sorts of riders from which you can choose a suitable option depending on your needs. As a result, it becomes simple to protect oneself at a low expense. You can personalise your insurance policy by adding a rider to any type of policy, including term, ULIP, endowment, and whole life. Since riders are optional features added to life insurance plans, payments to riders are tax-deductible under the current tax regulations.

Take Away

Understanding the various riders in term insurance might help you in making an informed decision when purchasing a term insurance policy. Riders also broaden the scope of your policy's coverage. So, to protect yourself and your loved ones' futures, make sure to purchase the best term insurance with appropriate riders. 

You may also like to read - Why term insurance plan is right for home insurance buyer?

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.

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