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Key Reasons To Invest In Accidental Death Benefit Rider

Updated On Jan 07, 2022

The primary reason a person seeks a source of income is for financial stability and independence. Salaries, on the other hand, are subject to setbacks, which can occur for a variety of reasons beyond anyone's control. Individuals accumulate money and, while doing so, invest in life insurance coverage to safeguard themselves against such threats. Riders are the types of coverage that are necessary for life insurance plans.

Riders are optional extra benefits that can be added to a current insurance policy. It's an add-on to a person's life insurance policy that protects them and their family from accidental death or disability. They raise a person's premium while also expanding coverage to include more unanticipated events like accidents, permanent and partial incapacity, serious sickness, and so on. To know more about accidental death benefit rider, read on.

Importance Of Accidental Death Benefit Rider

The Accidental Death Benefit Rider covers a seemingly irrevocable loss, such as a person's death. In any instance, if the sickness turns serious, the family will be faced with unexpected medical costs, the death of the individual, and the loss of future earnings. As a result, having an unintentional death rider is essential. The addition of an accidental death benefit rider reduces the financial burden of the only breadwinner's death, which includes both medical costs and a permanent loss of income.

How Do Accidental Death Benefit Rider Works?

In most cases, this rider will offer a lump sum payment to an insured individual's family in addition to the death benefit provided by the current life insurance policy.

This sort of rider was originally known as a double indemnity rider since the additional payout may potentially double the amount of money received by the particular individual's family. It's also worth noting that the family will only be reimbursed if the insurance company determines that the covered person's death fits the rider's standards.

Since it enhances their policy's coverage for individuals, an accidental death benefit rider will almost certainly increase the relevant premiums or payments. Adding such coverage to an existing insurance, on the other hand, may spare the respective persons' families from having to cope with large, unexpected expenses later.

Features Of Accidental Death Benefit Rider

  • Protective Layer

An insured person and their family are given an extra layer of security under this rider in the case of an unanticipated disaster. In the event of the respective individual's uncertain death due to an accident, the rider benefit amount is paid to the respective individual's family in addition to the death benefit. This rider also provides financial security to the family of the person. Allowing the family to meet urgent and ongoing costs, retain their way of life, and achieve their objectives.

  • Payouts

The accidental death benefit rider permits the rider benefit amount to be paid as a single payment or in regular installments, allowing the insured individual's family to receive a regular income. The nominee has the choice of selecting the payment method that best suits their financial requirements and circumstances. If the nominee chooses lump payment, the rider benefit and death benefit are paid in one single sum. If the nominee opts for regular installments, the rider benefit and death benefit are paid in equal payments over a certain period of time.

  • Tax Rebates

A tax credit is available for premiums paid for a term insurance policy and riders. An insured individual can claim tax refunds of up to Rs. 1.5 lakh under Section 80C and 10(10D) of the Income Tax Act, 1961, if the premium payment does not exceed 10% of the amount guaranteed. The insured individual benefits from the accidental death benefit rider in two ways: premiums paid for the rider qualify for tax exclusions under Section 80D of the Income Tax Act of 1961, and premiums paid for the rider qualify for tax exclusions under Section 80D of the Income Tax Act of 1961.


As a result, adding riders to a person's normal term insurance policy protects their family against financial troubles resulting from unanticipated events. Riders should always be tailored to an individual's specific needs in order to provide more protection for their loved ones while also assisting them in accomplishing their life objectives.

Also read - Why Term Insurance Riders Must Not Be Avoided?

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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