All About Riders in Term Insurance Plans
Updated On Jul 12, 2021
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A term insurance policy is regarded as a major financial decision that helps the family even when you are gone. Thus, it is crucial to build such a robust financial security wall that your loved ones won’t have to suffer through any financial strain and this can be ensured through suitable add-ons known as riders.
Riders can be seen as attachments, amendments or modifications which help obtain adequate coverage and additional benefits to complement your term insurance policy. These riders can be purchased at affordable prices to cover for situations other than the life assured’s death. The following article focuses on providing a guide about different riders to help you choose the most suitable ones for yourself.
How to Buy Term Insurance Riders?
Insurance companies offer riders along with the term insurance plans at the policy inception. Each rider offers additional coverage for specific situations. So, the policyholder can choose a suitable term insurance plan and can select necessary additional riders to tweak the plan. Interestingly, many insurance providers offer term insurance policies with in-built riders along with flexible plans. You can customize the policy in the latter option by choosing rider options according to your wants and wishes. Moreover, it is advisable that the policyholder take his/her time to choose an adequate rider option as these cannot be purchased again and again.
Types of Rider Options
Here is the list of rider options which are offered by several insurance providers.
1. Permanent and Partial Disability
We never know what our future holds, but we can prepare ourselves for the worst situations through proper planning. A permanent and partial disability rider benefits is such an option, which helps secure yourself financially if the disability is caused in an accident. The life assured gets a percentage of the sum assured regularly as income replacement for approximately 5-10 years. It is advisable to read all the terms and conditions regarding the accidents that will be covered under the rider plan to avoid any confusion.
2. Waiver of Premium
Term insurance normally lapse if premiums are not paid. However, if the policyholder is crippled or injured for an extended period of time, or if the policyholder dies while the life assured under the policy is alive, all future premium payments due under the policy after the date of such an incident would be waived, meaning they will not be required to be paid. Nonetheless, the policy's benefits will continue to be available to the life assured. This rider covers both permanent and temporary disabilities.
3. Critical Illness
This rider pays out if you are diagnosed with one of the critical illnesses listed in the policy document, such as heart attack, cancer, stroke, kidney failure, and so forth. In this case, the critical illness sum assured is paid in a lump sum. However, this rider benefit, as well as the price for it, ends after that.
4. Accidental Death Benefit
This is a rider benefit that is paid if the life assured dies in an accident within the rider benefit term. The accidental death sum assured is payable in addition to the basic sum assured in such a case. The premiums are low as it covers untimely and accidental deaths. Moreover, if the life assured dies within 90-180 days of the accident, the beneficiary will be provided with all the death benefits.
5. Accelerated Death Benefit
If the life assured has a terminal illness, the already struggling family will be forced to foot the bill for the treatment. So, through this plan, when the life assured is extremely ill, he/she will receive a partial advance of the sum assured from the insurance provider. Moreover, if the life assured has less than 12 months to live, the advance payment can be used to cover the costs of treatment and other necessities.
It must be noted that only necessary rider options should be purchased to keep the policy under your budget. You can consult a credible financial advisor or an insurance agent to select the best rider options which are according to your needs.