Learn Some Reasons To Opt For Accidental Death Benefit Rider

What exactly are riders? Riders are additional benefits that can be added to a term life insurance policy in addition to the basic coverage. They increase a person's premium while also expanding their coverage to encompass more unforeseeable situations like accidents, permanent and partial disability, severe disease, and so on. The Accidental Death Benefit Rider is one such rider. It is a supplement to a life insurance policy that covers the insured and their family from death or incapacity due to an accident. It functions as a double-protection rider, which means that death caused by an accident is covered by both the life insurance policy and the rider's sum. Continue reading to learn more about the accidental death benefit rider.

Is the Accidental Death Benefit Rider Important?

The Accidental Death Benefit Rider addresses an unmistakable, irreversible loss: the death of a life. As a result, their family is faced with both emotional and financial difficulties. Emergency medical expenditures are already out of reach, and if the sickness proves fatal, the family will have to deal with the death of a loved one as well as lost future wages. As a result, an unintentional death rider is critical. The addition of an accidental death benefit rider helps to mitigate the financial impact of the breadwinner's death, which comes with both medical expenditures and a permanent loss of income.

What is the Accidental Death Benefit Rider?

Most accidental death benefit riders will provide a lump sum payment to an insured person's family in addition to the death benefit granted by their regular life insurance policy. This type of rider was originally known as a double indemnity rider since the additional payout may double the amount of money each particular family received. If the insurance company certifies that the insured person's death meets the provisions of the rider, the reimbursement will be made to their loved ones.
Although an accidental death benefit rider increases their policy's coverage, it nearly always increases their premiums or payments. Adding such protection now, however, may save their family from having to deal with significant, unexpected expenditures later.

Accidental Death Benefit Rider's Importance

Layer of Defense

The accidental death benefit rider provides an extra layer of financial protection for an insured person's life and their family against life's uncertainties. The family of the respective individual will receive 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, and everyday expenses, maintain their lifestyle, and attain their goals.

Payouts

The accidental death benefit rider allows the rider benefit amount to be paid as a lump sum or as recurring installments, which can provide a regular income for the insured individual's family. The nominee can choose the payment method that best meets their financial needs and circumstances. The rider benefit is paid in one lump amount together with the death benefit if the nominee chooses lump payment; if the nominee chooses regular installments, the rider benefit is paid in equal installments over a certain period along with the death benefit.

Rebates on Taxes

Premiums are paid toward a term insurance policy and riders are eligible for tax credits. If the premium payment does not exceed 10% of the money guaranteed, an insured individual can claim tax refunds of up to Rs. 1,50,000 lakh under Section 80C and 10(10D) of the Income Tax Act, 1961. Because the premiums paid for the rider qualify for tax exclusions under Section 80D of the Income Tax Act of 1961, the life assured benefits from a two-fold tax advantage.

Take Away

Adding riders to a person's standard term insurance policy protects their family from financial hardships caused by unforeseen catastrophes. Individuals should always choose riders depending on their specific needs to provide their loved ones with more security and help them achieve their life objectives.

Also Read: Some Life Insurance Riders You Must Consider