Income Benefit Rider
Income benefit rider provides regular instalments/substitutes the regular income, to the family of the life assured, in case of an untimely demise of the life assured during the coverage period. Income benefit riders can substitute the financial income of the life assured even in their absence.
- Tax BenefitUp to 1,50,000**
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**Tax benefits are subject to changes in Income Tax Act.
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As the name suggests, the income benefit rider with term insurance helps a life assured ensure that their family is financially protected even in their absence. The income benefit rider provides a regular income to the family of the life assured.
Under the rider, a pre-decided number of monthly installments (equivalent to the monthly income of the life assured) is finalized. The monthly installment is given to the life assured’s family in the event of the unpredicted demise of the former during the policy tenure.
One of the key benefits of the term plan is that the life assured’s family stays unaffected in terms of financial security, irrespective of the circumstances. They can easily get their daily financial requirements met apart from maintaining a healthy lifestyle even if the life assured is not there to support.
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Eligibility Criteria of Income Benefit Rider
The eligibility criteria for income benefit rider is as follows:
Eligibility Criteria for Income Benefit Rider
Minimum Entry Age
Maximum Entry Age
Maximum Maturity Age
Minimum - Same as base policy’s sum assured
Maximum - No Limit
Coverage Time Period
Same as base policy’s term
Premium Payment Term
Same as base policy’s term
Premium Payment Mode
Same as base policy’s premium payment mode
Documents Required for Income Benefit Rider Claim
The list of documents required for income benefit rider claim are as follows:
- Policy Documents Original/Copy
- Filled Claim Duly Filled
- Photo ID & Address Proof of Policyholder
- Medical Test Reports
- Nominee’s Photo ID & Address Proof
- Copy of policyholder’s bank statement/cancelled cheque
- Attending Medical Practitioner's Certificate
Income Benefit Rider Exclusions
The list of exclusions under the income benefit rider is as follows:
- Hereditary Diseases
- Pre-existing Medical Condition
- Drug Abuse/Overdose
- Participation in civil commotion, riots, war or rebellion
- Attempt to suicide or self-inflected injuries
Importance of Purchasing Income Benefit Rider
Income benefit rider can be a good choice of additional coverage under a term insurance policy, in case the life assured is worried about the source of income for his/her family, in the absence of the life assured. Here are few reasons why you should consider Income Benefit Rider for your term insurance policy:
1. Income Benefit: Under the income benefit rider, regular instalments are provided as a payout, in case an unforeseen event occurs such as untimely demise of the life assured during the coverage period. A pre-decided number of instalments which can be equivalent to monthly instalment, for a pre-fixed period of time, shall be provided to the family of the life assured, in case of an untimely demise of the life during the covered period. This rider can help the life assured ensure financial stability and income for his/her family in difficult circumstances. Income Benefit riders can help substitute the income of the life assured, in their absence. This rider can be a great addition to a term insurance policy.
2. Financial Security: Income benefit rider definitely provides financial security to the family of the life assured in case of an unforeseen demise of the life assured. This rider can substitute the income of the life assured, in case of his/her untimely demise during the coverage period, which can help the family member to maintain their lifestyle even in the absence of the life assured. The regular instalments, which can be regular monthly instalments for a decided time period, can help the family of the life assured to fulfill their daily expenses, complete their goals and maintain a healthy lifestyle even if the life assured is not around.
3. Tax Benefits: Under term insurance policy, the life assured can avail tax benefits for the premiums paid towards the term insurance policy and rider. The life assured can avail upto Rs. 1.5 Lakh of tax exemption under the Section 80C and Section 10(10D) of the Income Tax Act,1961. Premiums paid towards the income benefit rider are also eligible for tax exemption under the section 80D of the Income Tax Act, 1961. The life assured can avail tax exemption if the premiums do not exceed 10% of the sum assured.
4. Economical Option: Income benefit rider is an economical additional coverage that can be purchased along the term insurance policy. This rider is affordable and can enhance the power of the term insurance policy at a nominal cost. This rider provides financial protection to the family of the life assured and substitutes the income of the life assured in the event of an untimely demise of the life assured. The premiums for such riders are comparatively lower than that of a term insurance policy, you may have to pay an additional premium for additional coverage but at a nominal cost.
5. Eliminates the Need of Multiple Policies: Purchasing an income benefit rider can eliminate the need of multiple policies, as these riders last as long as the term insurance policy and provide the same level of coverage which results in enhanced coverage. If you purchase a rider, you may not need to purchase another policy for yourself.
Term Insurance Companies
- ICICI Prudential
- Aditya Birla
- PNB MetLife
- Bharti AXA
- Edelweiss Tokio
- Bajaj Allianz
- Canara HSBC OBC
- Tata AIA
- Future Generali
- Star Union Dai-ichi
- Ageas Federal
Disclaimer: InsuranceDekho does not endorse, rate or recommend any particular insurance company or insurance plan.
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