Term Insurance Riders
Riders in Term Insurance are optional additions that provide extra coverage beyond the basic policy. They can be added for an extra premium, offering enhanced coverage and other benefits.
Term insurance itself pays a death benefit if the insured person passes away during the policy term. Term Insurance Riders add specific protections tailored to different needs. These options vary among different insurers, allowing policyholders to choose what suits them best.
While riders aren't mandatory, they are often recommended for their comprehensive coverage, helping secure your family's financial stability during life’s uncertainties. Contrary to the belief that riders are costly, selecting them wisely can enhance your policy's value without significantly increasing costs. Understanding each rider's terms and benefits is crucial for making informed decisions about your insurance coverage. Let’s learn in more detail.
Highlights of Term Insurance Riders
Types of Term Insurance Riders
Term plans often come with optional add-ons called riders, each priced differently with specific terms and conditions. Here's a list of common term insurance riders:
Provides extra coverage in case of the insured’s death in an accident. The extra amount depends on the original sum assured and varies with different insurers. The premium for this rider stays the same throughout the policy, but some insurers may limit the maximum amount you can get with this rider.
Allows the insured's family to receive a portion of the sum assured if the insured is diagnosed with a critical illness, helping cover treatment costs.
Supports the insured with income if they suffer from complete or partial disability due to an accident, typically for 5 to 10 years.
Gives a lump sum if the insured is diagnosed with a listed critical illness like cancer or heart attack, paralysis, kidney failure, stroke, organ transplant etc. with options to continue or terminate the policy after receiving the amount.
Waives future premiums if the policyholder can't pay due to income loss or disability, ensuring the policy remains active. In absence of this rider, if you stop paying the premium for any reason, your policy could expire, and your nominee might not receive the death benefit.
Provides additional income for the insured's family in case of their untimely demise, along with the regular sum assured, for a specified period ranging from 5 to 10 years. It can be purchased along with the main policy at an additional premium.
Ensures financial support for the insured's child in case of the insured's untimely death, helping them achieve life goals without financial constraints.
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Term Insurance Riders Insurance Everything You Want to Know
Benefits of Term Insurance Riders
Riders offer several benefits and enhance the basic term plan.
Riders increase the total coverage amount that the nominee receives as compensation. For example, if your base plan is ₹50 lakhs and you add a ₹25 lakhs rider, the total coverage becomes ₹75 lakhs.
Riders provide extra financial protection for the family in case of the insured’s sudden death, covering their needs better. Some riders also protect the insured in cases of disability or critical illness.
Term insurance riders offer significant benefits at reasonable premiums. They are more cost-effective than buying separate policies for different coverages like accidents or critical illness, making it easier to manage.
Why To Buy Term Insurance Riders?
Securing your family financially with term insurance is crucial, and adding term insurance riders provides extra support for their comfort in your absence. Riders are a practical option because life is unpredictable.
Here are key reasons to buy term insurance riders:
Riders in term insurance let you avoid having multiple policies for different needs like accidents or critical illness. They add coverage for these issues, beyond the basic death benefit of term plans, making it easier to manage your insurance.
Riders help you save money by providing the necessary benefits at a lower cost compared to buying separate policies for each need.
Riders offer additional financial support to your family when they need it most, ensuring they can live comfortably after you are gone.
Premiums for term insurance, including riders, qualify for tax deductions under Section 80C of the Income Tax Act, providing further financial advantage.
Wrapping up
To wrap it up, term riders are optional add-ons to your insurance policy that provide extra protection. Before choosing a rider, remember:
- Riders are optional and come with specific conditions.
- They offer additional protection for the insured and nominees.
- Riders generally cost less in premiums compared to the base policy.
Make sure to understand the benefits, inclusions, and exclusions of term riders before purchasing.
Term Insurance Riders - Inclusions and Exclusion
Term Insurance Riders - Inclusions
Accidental death
Critical illness
Disability
Income benefit
Enhanced coverage on base policy
Tax benefits
However, in the case of death during the waiting period for any reason other than accidents, 100% of the premium is paid back.
Term Insurance Riders – Exclusions
Death caused by driving under the influence of alcohol
Loss of life during war or terrorist activities
Death due to natural disasters
Intoxication
Death due to adventure sports
Factors Affecting the Term Insurance Riders Premium
Comprehensive Term Insurance Claim Procedures
Below the are steps to raise a cashless comprehensive term insurance claim:
Documents for Claiming Term Insurance
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Riders refer to the optional, add-on benefits that can be added to your basic existing policy at an additional premium payment.
