Know Everything About LIC Term Rider
Updated On Oct 03, 2023
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A rider is a policy's optional add-on that extends the coverage of an existing policy that belongs to an insured individual. So, as long as the policy allows it, an insured individual can purchase a rider. Typically, an insured individual must select the rider when purchasing the policy. Life insurance providers provide a plethora of riders to choose from.
The LIC Term Rider Policy is an add-on benefit to the basic policy that pays the assured amount to the family if the insured individual dies unexpectedly during the policy period. This can be added to an individual's current policies for a small fee at the start of the basic policy. To find out more on LIC term rider, read on.
Features Of LIC Term Rider
Following are some listed features of LIC term insurance for riders -
- The basic policy's assured sum must be larger than or equal to the rider benefit's Sum Assured.
- The total sum promised to the rider benefit cannot exceed Rs 25 lakh if two or more insurance policies are acquired together.
- It’s very cost-effective compared to the comprehensive coverage that it’ll provide.
Eligibility Criteria For LIC Term Rider
The insured individual's minimum age at entrance should be 18 years old (completed), and the insured individual's maximum age at entry should be 60 years old to be eligible to acquire the LIC Term Rider Policy. The rider insurance has a maturity age of up to 75 years.
LIC Term Rider - Tenure & Payouts
The LIC Term Rider Policy is available for a minimum of 5 years and a maximum of 65 years. The assured sum might be as low as Rs 1 lakh and as high as Rs 25 lakh. The payment method and frequency are the same as the base policy. Both the rider premium and the basic policy must be paid at the same time. In insurance, there is no such thing as a paid-up value. This implies that if the premiums are not paid, the rider benefit would be lost. For the same, no further documents are necessary.
LIC Term Rider - Refunds
The following are the listed conditions for refunds:
- In the event of the regular premium plan, there are no refunds.
- Only if the payment has been made for the minimum length of the term period is a refund available for the Limited Premium Plan. The sum should be paid for at least 2 years if the contract duration is 10 years. If the term was more than ten years, the money shall be paid for a 3-year period. If these conditions are satisfied, 75 percent of the agreed-upon value will be returned.
- For a Single Premium Plan, a refund may be computed by adding 90 percent of the paid rider's premium to the remaining policy term and dividing the result by the initial rider tenure.
Benefits Of LIC Term Rider
The premiums paid for the rider are tax deductible under Section 80C of the Income Tax Act. And the death benefit received is tax-free under Section 10 of the Income Tax Act (10D).
Cool Off Period
If an insured individual purchases LIC's New Term Assurance Rider but is not totally satisfied with the terms and circumstances, then they’re allowed a 15-day cooling-off period. The respective individual has the opportunity to terminate the rider within this time period, which begins on the day the policy was acquired. When the Corporation receives the request, the rider will be terminated, and the premium paid for the rider will be refunded after subtracting the necessary expenditures.
The insurance will lapse if an insured individual does not pay the premium during the grace period. The arrears, as well as interest, must be paid in order for the policy and rider to be revived. It's important to remember that the payment must be made within 2 years of the date of the first overdue premium. It's also worth noting that the rider will only be revived in conjunction with the basic policy, not on its own.
As the base policy cannot be customized, an individual can always add rider benefits to boost their total financial protection. Before adding a rider or selecting a policy, an individual should always make sure that they understand the policy's terms and conditions.
Disclaimer: This article is issued in the general public interest and is 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.