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Term Insurance Riders - Meaning and Benefits Explained

Published On Nov 24, 2021

What are term insurance riders? It's an addition or modification to an individual’s insurance policy that extends the policy's coverage. Those extra perks or privileges that might improve a term plan by spending a few extra dollars are called term insurance riders. For example, a waiver of premium rider waives off their future payments and allows an insured individual to keep their term life insurance coverage if they are unable to pay the premium due to unforeseen events.

Term insurance riders are offered by several insurance firms as part of their term insurance contracts. Although term insurance riders may not be required, it is strongly suggested that insured individuals add one to their basic policy to be prepared for their life's uncertainties. To understand more on term insurance riders for an individual, read on.

Term Insurance Rider Benefits

Following are some term insurance riders and their benefits that’s ensured to an individual -

1. Accidental Death Benefit Rider

Under this rider, if an insured individual dies in an accident, an extra payment is guaranteed under the rider and is paid out in addition to the basic policy value promised. Let’s consider the following scenario: Imagine an insured individual who purchases a Rs. 80 lakh term insurance policy with an Accidental Death Benefit rider of 20% of the total guaranteed. If an insured individual dies in an accident, the dependents will receive Rs 80 lakh plus an extra 20% of Rs 80 lakhs, or Rs 16 lakhs. As a result, they will receive a total of Rs 96 lakhs. This additional cash assures that your loved ones may continue to pursue their life objectives without fear of any financial hardship in the future.

Must Read: Are Riders Extra Benefits With Life Insurance?

2. Critical Illness Rider

Under this rider, an insured individual receives a lump sum payment if they are diagnosed with a catastrophic disease covered by the rider. The purpose of this rider is to offer an insured individual with a lump sum payment to assist them in receiving medical care for a serious illness, as well as to guarantee that the financial weight of unforeseen medical costs does not derail life of an insured individual or their family’s ambitions.

3. Waiver Of Premium Benefit Rider

Under this rider, it’s assures that if an insured individual is unable to pay the premium owing to unforeseen events like death, severe illness, or permanent complete disability resulting from an accident. All future premiums for the term insurance policy are waived off for the respective insured individual. This implies that the term insurance policy will continue to be valid until it expires, and the life guaranteed or family members will not be required to pay any further premiums until the policy expires. It is taken care of by the life insurance provider, providing further protection to an insured individual’s life objectives.

4. Accidental Permanent Total/Partial Disability Rider

Under this rider, an amount is given to an insured individual through this rider in the event of a whole or partial incapacity caused by an accident. Since the life guaranteed is unlikely to be able to pay for medical expenditures and a further decline in their earning ability. The insurance company compensates them with a pre-agreed percentage of the whole sum assured.

5. Family Income Benefit Rider

Under this rider, an insured individual’s family receives 1% of the rider sum insured every month for the remainder of the rider term, subject to a minimum of 10 years, if an unforeseen event as stated in the terms and conditions occurs. This allows an insured individual’s family to receive a regular monthly income in the absence of their salary, allowing them to cover day-to-day costs while still staying on track with their life objectives.


Therefore, adding riders to an individual’s standard term insurance plan helps safeguard their family from financial hardships caused by unforeseen events. An individual should always choose riders according to their specific needs, in order to provide their loved ones additional comprehensive security and to help them achieve their life objectives.

Also Read: What is the Significance of Riders in Life Insurance?

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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