Is Choosing A Rider When Purchasing A Term Plan A Good Idea?
Updated On Sep 02, 2022
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Purchasing a term insurance policy is the most prudent approach to offering financial protection to those who are financially reliant on you in the event that you pass away unexpectedly. Although you will be required to choose the amount of coverage as well as the duration of the policy, term insurance plans typically include a number of additional riders that can be purchased for an additional cost. Even if the riders come with a few advantages, you shouldn't add them to your term insurance plan before you've thoroughly understood what they entail.
Is Choosing A Rider When Purchasing A Term Plan A Good Idea?
Riders are optional supplemental benefits that are added to a term insurance policy. Riders can offer the policyholder greater financial protection at a minimal additional expense. Riders are referred to as "riders." They are an integral part of the fundamental or principal policy.
Following are the reasons why one should choose riders in their term insurance plans.
- Extended Coverage
Although a term insurance policy will offer adequate financial protection for the policyholder's loved ones in the event of the policyholder's death or permanent absence, a term insurance policy will not cover the cost of the policyholder's medical care or the loss of income that would result from the policyholder's inability to work. If you are totally and permanently disabled, you may be able to have your insurance premiums waived if you have a policy that includes a "waiver of premium" rider.
- Cost-effective
Purchasing an additional insurance policy on top of your existing one to cover the cost of medical bills, severe diseases, accidental death, or incapacity can be an expensive endeavor. If you include the appropriate riders in your term insurance plan, you will be able to pay the premium for another plan without experiencing any of the usual difficulties. It is possible to opt for riders by paying an additional premium. Nevertheless, doing so will save you money compared to purchasing a new plan.
- Provides emergency income
Having a decent rider to cover these circumstances would pay out a particular percentage of sum assured to the policyholder's family over the course of a set time period in the event that the policyholder, the earning member of the family, is incapable of providing income for their household members as a consequence of either partially or completely accidental dismemberment. This payment would be sent to the family of the policyholder. This eliminates any possibility of the involved party being insured having to deal with any kind of monetary stress as a result of the absence of a consistent income.
- Tax Benefits
Receive tax breaks on riders in accordance with the requirements of the Income Tax Act of 1961, as amended.
Conclusion
Even if you are not there, the members of your family will still be able to maintain their standard of living with the assistance of a term plan. A term plan will take care of everything for you, from managing your daily bills to achieving significant life goals like providing for your children's education. When you purchase a term insurance plan, you are effectively purchasing protection for the financial well-being of your family in the future.
Also read: Why Should I Add Riders to my Term Insurance Policy?
