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Term Insurance Riders: Concept & Benefits

Published On Oct 10, 2021 12:00 PM By Yamini Sharma

Have you been thinking of buying a term insurance policy? If so, rest assured you have made a great decision towards ensuring the financial stability of your family members in case of your unfortunate death. You can choose your term insurance policy sum assured as per your requirements. However, if you feel the need to extend your cover, opting for a term insurance rider would be a good decision to make. 

What are Term Insurance Riders?

Term insurance riders are add-on covers that a policyholder can purchase to extend their base policy benefits. Riders are optional and can be added to the term insurance policy at the time of policy purchase or policy anniversary, depending on the terms and conditions of the insurance company. Easily available and extremely affordable, term insurance riders enhance the scope of protection offered by the base term insurance policy by offering various additional benefits and more protection against multiple risks. While most people remain under the misconception that riders are unnecessary, the fact is that riders help policyholders at a time when they find themselves amidst the shortage of finance even after having a term insurance plan. 

Term insurance riders can be categorized into various types. Some of the common term insurance riders include:

  • Accidental Death Benefit Rider
  • Accelerated Death Benefit Rider
  • Accidental Disability Rider
  • Waiver of Premium Rider
  • Family Income Rider
  • Critical Illness Benefit Rider
  • Income Benefit Rider
  • Child Support Benefit Rider 

It is important to note that each rider comes with its own unique benefits and serves a different purpose. Adding a rider can definitely require you to pay an additional amount, but it is also worth the investment. 

What Are the Benefits of Term Insurance Riders? 

  • Policy Customisation

    By opting for a term insurance rider, you can easily customize your term insurance policy as per your specific needs. If your term insurance needs are more than just basic coverage against the risk of death, you can get yourself protected against a potential risk, which is uncovered in your basic plan. Remember, while the accidental death benefit rider will provide cover for death due to an accident, the waiver of premium rider will waive off all the future premium based on certain conditions. If you wish to customize your policy as per certain risks, riders are the perfect way to do so.
  • No Need for Additional Policy

    One of the best things about a rider is that they eliminate the need for buying a completely new policy. You may not find a term policy offering cover for all risks like accidental death, total/partial temporary disability, permanent disability, loss of income, and others. However, you can easily find riders supporting the same by providing extra cover under the base term insurance plan. Investing in a rider would definitely eliminate the need for you to buy an additional term insurance policy. All you will have to do is just buy riders of your choice. 
  • Enhanced Affordability

    Purchasing a life insurance rider eliminates the need to buy an extra life insurance policy. Riders will prevent you from paying high premiums for an extra life insurance policy. Always keep in mind that premiums paid towards a term insurance rider would be comparatively much more affordable than an extra functional term insurance plan. 
  • Tax Benefits

    Term insurance riders will help you reap tax benefits under the Income Tax Act, 1961.

Also read: Salient Features Of Life Insurance Riders

8 Common 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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