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Understanding The Importance Of Accidental Death Benefit Rider In Term Insurance

Updated On Dec 07, 2021

In addition to the standard coverage, riders can be added to a term life insurance policy. They raise a person's premium while simultaneously expanding coverage to include more unforeseen events such as accidents, permanent and partial incapacity, serious disease, and so on. One such rider is the Accidental Death Benefit Rider.

It's an add-on to an individual’s life insurance policy that protects them and their family from accidental death or disability. It works as a double protection rider, meaning that in the case of an accident, both the life insurance policy and the rider's sum are protected. To know more about accidental death benefit rider, read on.

Importance Of Accidental Death Benefit Rider

The Accidental Death Benefit Rider deals with an unmistakable and irreversible loss, the death of a person. 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 main earner’s death, which comes with both medical expenditures and a permanent loss of income.

How Do Accidental Death Benefit Rider Works?

In most cases, an accidental death benefit rider will provide a lump sum payment to an insured individual'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 possibly double the amount of money each individual family received. If the insurance company certifies that the insured individual’s death meets the requirements of the rider, the reimbursement will be made to their loved ones.

An accidental death benefit rider will almost probably increase their premiums or payments because it expands their policy's coverage. However, Adding such protection now may save their family from having to deal with significant, unexpected expenditures later.

Features Of Accidental Death Benefit Rider

  • Protective Layer

The accidental death benefit rider gives an extra layer of financial protection to an insured individual’s life and their family against life's unforeseen events. 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 insured individual's family in the event of their death. The rider benefit provided under this rider can operate as a buffer, allowing the family to cover urgent costs, 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 instalments, 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 opts for lump payment. If the nominee opts for regular instalments, the rider benefit is paid in equal instalments over a certain length of time along with the death benefit.

  • Tax Rebates

Premiums paid toward a term insurance policy and riders are eligible for a tax rebate. If the premium payment does not exceed 10% of the sum promised, an insured individual can get tax rebates of up to Rs. 1,50,000 lakh under Section 80C and 10(10D) of the Income Tax Act, 1961. As premiums paid for the rider qualify for tax exclusions under Section 80D of the Income Tax Act of 1961, the accidental death benefit rider gives a two-fold tax benefit to the life assured.


As a result, adding riders to a person's standard term insurance policy protects their family against financial hardships caused by unforeseen circumstances. Individuals should always select riders based on their unique requirements in order to give more protection for their loved ones and assist them in achieving their life goals.

Also read: 

Things to Consider While Selecting Term Insurance Riders

How Riders Add Value To Term 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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