Understanding Accidental Benefit Riders in Term Insurance
Published On Aug 01, 2021 12:00 PM By InsuranceDekho
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Term insurance is the ideal option to ensure financial stability of your loved ones. However, you can take the benefits of term insurance to the next level by opting for accidental benefit riders. Adding accidental benefit riders to your term is quite simple. However, note that you will have to pay an additional premium price to enhance your range of benefits.
What Are Accidental Benefit Riders in Term Insurance?
Accidental benefit riders in term insurance are the riders that provide certain benefits to the nominees in case of the policyholder meeting with an accident, resulting in the latter’s death or disability. Accidental benefit riders are classified into two parts, namely accidental death benefit rider and accidental disability rider. Let us understand both one by one.
Accidental Death Benefit Rider
Under accidental death benefit rider, the term insurance policy payout is increased in case of death of the policyholder in an accident. For instance, if the base coverage amount of the term plan is Rs. 60 Lakhs and the accidental death insurance rider coverage is Rs. 15 Lakhs, the nominee will receive Rs. 85 Lakhs in the event of death of the policyholder due to an accident.
It must be noted that even if the insured passes away due to any reason other than an accident, the base sum assured amount of Rs. 60 Lakhs will be paid to the nominee.
In other words, the accidental death benefit rider does not decrease the amount received by the nominee.
The payment is made in lump sum form.
Accidental Disability Benefit Rider
Accidental disability benefit rider or dismemberment benefit is a rider that becomes active if the policyholder becomes disable due to an accident. Under this rider, the policyholder gets a certain percentage of the sum assured for the next few years if they meet with an accident that leaves them permanently partially disabled.
One of the key advantages of this accidental benefit rider is that it helps one make up for the loss of the income source of the insured individual. It comes as of great use if the insured loses their job due to the disability.
It must be noted that the percentage of the sum assured and the period paid for depend on the severity of the burns as well as numerous other factors related to the term insurance policy.
Which One to Add to a Term Insurance Policy?
Accidental benefit riders are advised to people who travel frequently for work purposes or work in dangerous conditions. However, accidents cannot be predicted, so it is advisable to buy an accidental death benefit rider while purchasing a term insurance plan to cover all kinds of risk.
Now that you know the importance and purpose of accidental benefit riders in term insurance, go ahead and buy them right away! Make sure you read the policy wordings carefully to have a thorough understanding of all the concepts.
Also Read:- All About LIC's Premium Waiver Benefit Rider
What Is A Child Rider In Life Insurance Policy?
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.