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Meaning of Term Insurance Rider

Updated On Aug 29, 2021

The ultimate purpose of a term insurance policy is to grant financial protection to the family members after the demise of the policyholder. Needless to say, buying a term insurance plan is a wise decision to ensure financial security of loved ones and save them from facing financial struggles. However, adding a rider is always advised so that the protection level can be increased. 

What is a Term Insurance Rider?

A term insurance rider is the additional protection that a policyholder can buy to extend their benefits. Term insurance riders are not mandatory, however they are highly recommended as the coverage becomes more comprehensive and powerful. It must be noted that term insurance riders can be added to the base policy by paying a minimal additional premium amount. 

Types of Term Insurance Riders Available 

The types of term insurance riders available for policyholders are:

  • Accidental Death Benefit Rider

    This rider provides an additional sum assured to the nominee if the policyholder dies due to an accident during the policy tenure.
  • Accidental Disability Rider

    This rider provides sum assured (in lump sum form or as monthly income) against the rider if the policyholder becomes disabled (total/ permanently or partially) due to an accident. 
  • Critical Illness Rider

    This rider provides sum assured against the rider if the policyholder is diagnosed with any of the covered critical illnesses. 
  • Income Benefit Rider

    This rider provides the nominee with the sum assured in the monthly income form for a fixed tenure if the policyholder dies during the policy tenure.
    Also read: Should You Go For Riders In Term Insurance?    
  • Waiver of Premium Rider

    This rider provides benefits on disability or critical illness. If the policyholder choses waiver of premium on disability, their future premiums are waived off if they get permanently disabled during the policy tenure. However, if the policyholder choses waiver of premium on critical illness, the future premiums are waived off if the policyholder is diagnosed with a critical illness covered under the plan. 
  • Child Support Benefit Rider

           This rider pays an additional sum assured upon death of the policyholder so that the child's needs are taken care of                           without any financial constraints.

Things to Know About Term Insurance Riders

The list includes:

  • Most plans allow addition of riders during the policy inception or any policy anniversary.
  • Riders come at a lower premium rate than the base policy.
  • Sum assured of riders is less than that of the base policy. 
  • Riders come into action when an untoward incident takes place with the policyholder. 

Final Words

Whether or not you need a term insurance rider totally depends on your requirements. If you think adding a rider to the base policy would strengthen the coverage and bring the desired protection for your family, go ahead with it. Make sure you read all the rider terms and conditions beforehand to be sure of your choice. 

Also read: Common Exclusions Under Life Insurance Riders

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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