Why is it Important to Have A Rider in My Plan?
Updated On Aug 30, 2022
Table of Contents
A term insurance plan is the most basic type of life insurance. It gives your loved ones a financial safety net in case they need it. A basic term insurance policy with life insurance coverage that fits your needs is an important way to protect your family in case of financial emergencies.
But sometimes, like when someone gets sick or has an accident, they need a more extensive and protective cover. This is when you should think about adding life insurance riders to your term insurance.
What are The Benefits of Having A Rider in My Plan?
Aside from making your term insurance plan cover more, riders are helpful because you don't have to buy a separate plan for something unexpected. You can add riders to your base plan for an extra fee, but that is much cheaper and less of a hassle than buying a second policy to get more coverage.
Also, a stand-alone health insurance policy will require a separate medical check-up. This is not the case when you add a health rider or a critical illness insurance rider to your plan. But if you have a disease or illness that you had before you bought your term plan, be sure to tell your insurance company about it.
Term life insurance is also easier to manage because you only have to deal with one plan. This is because a single plan can protect you from a variety of unplanned events, such as an accident-related death or disability, a critical illness, or a hospital stay.
Why Is It Important to Have a Rider in My Plan?
The following are the reasons why having a rider in an insurance plan is a must.
- Extended Coverage: A term plan will cover your family financially if you can't, but it won't cover the cost of emergency medical treatment or the loss of income if the insured member is completely disabled and can't work. With a waiver of premium rider, if you become totally and permanently disabled, your term plan premiums will not be due. Still, the policy stays the same.
- Cost-Effective: Buying a separate insurance plan on top of your current term plan to cover medical bills, accidental death/disability, or critical illnesses can be very expensive. If you add the right riders to your current term plan, you won't have to worry about paying for another plan. Term plan riders cost more than just buying a new policy, but they are still cheaper than buying a new policy.
- Provides Emergency Income: If the insured is the only person in the family who earns money, and they become partially or completely disabled due to an accident, an appropriate rider would pay out a certain percentage of the sum assured to the insured's family over a certain number of years. This makes sure that the policyholder's family doesn't have to go through hard times because they no longer have a steady income.
- Tax Benefits: According to the current tax laws in the country, the premiums paid for term insurance are eligible for a tax deduction under Section 80C, and the sum assured paid out to the beneficiaries is eligible for a tax exemption under Section 10 (10D) of the Income Tax Act. Under Section 80D of the Income Tax Act, you could get a tax break on the premiums you pay for term insurance riders like health riders, critical illness riders, hospitalization riders, etc.
Conclusion
Adding the right riders to your term insurance plan at the right time can be very helpful. As a result, you should make it a habit to ensure that you fully comprehend the entrance age for the riders, in addition to any other essential particulars concerning the addition of riders to your term life insurance policy.
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