Best term insurance riders that you should know about
Do you want to strengthen your life coverage plan so that your family is better protected under any unfortunate circumstances? Then, a term insurance rider is your utmost choice. Riders imply some add-on benefits that you can purchase and add to your main life insurance policy. In addition, riders offer you a spectrum of additional benefits apart from the prime benefit (a death benefit).
Most term insurance plans come with term rider benefits. Depending on your term insurance plans, the riders and their costs may vary from company to company. Though some riders are incorporated into your term insurance plans as an inbuilt feature, sometimes you may need to purchase other riders by paying extra. Since a little underwriting is required, but, the additional premium will not burn your pocket. So, before investing in a term insurance policy, check with the insurer about the riders that will come with your plan.
List of 6 Best term insurance riders and their benefits
- Accidental Death Benefit Rider
- Accelerated Death Benefit Rider
- Accidental Disability Benefit Rider
- Critical Illness Benefit Rider
- Family Income Benefit Rider
- Waiver of Premium Rider
1. Accidental Death Benefit Rider
Life is full of unpredicted events, and in today’s digital-driven world, the number of accidents is growing at a harsh pace. Thus, you always go for an add-on layer of security to protect the future of your family members. This rider will offer an additional sum assured if the policyholder dies due to an accident. The additional amount will vary from company to company and, based on the original sum assured, it will be calculated.
People often think that they will receive only the sum assured in case of accidental death. However, you will get the basic sum assured without this rider also. This rider only offers a surplus amount (over & above your basic sum assured) if the policyholder has an accidental death.
For instance, suppose you have purchased a term insurance policy of 60 lakhs along with 20 lakhs accidental death benefit rider. Then, you will receive 60 lakhs from the insurer in case of non-accidental deaths, and for accidental death, you will get 80 lakhs (60+20).
Work in a risky environment, and you are the only bread earner of your family. This accidental death benefit rider will take excellent care of your surviving family members.
2. Accelerated Death Benefit Rider
With this type of rider benefit, a policyholder can avail of the death benefits if identified with a terminal illness that will results in death within the next few months. According to this rider benefit, the family will get a part of the sum assured in advance from the insurance company. They can utilize this amount for medical treatment on those crucial days. The company notifies the rider how much sum assured they would get in advance. Since the premium cost is minimal, an accelerated death benefit rider is imperative for policyholders. But different companies use different definitions of “terminal illness.” Thus, you should understand and check what the rider covers before investing a single penny.
3. Accidental Disability Benefit Rider
If a policyholder gets disabled (permanently or partially) because of an accident, this rider comes as a shield. Under this policy rider, most insurance companies pay the disabled policyholder a certain percentage of the sum assured for the next 5-10 years. Very often, this rider is amalgamated with an accidental death benefit rider. This rider is applicable only if the policyholder becomes disabled after an accident. Before eligible for this rider, you need to meet certain terms and conditions set by the insurers.
4. Critical Illness Benefit Rider
Under this policy, a policyholder receives a hefty amount after being diagnosed with a certain pre-defined illness. For example, illnesses under “critical illness category” include cancer, paralysis, stroke, organ transplant, kidney failure, coronary artery surgery, grafting, etc. After detection of the illness, your policy may continue or terminate as per the conditions determined by the insurance providers. To understand all terms and conditions related to the critical illness rider, it is recommended to check the policy thoroughly before taking the final call.
5. Family Income Benefit Rider
If a policyholder dies, this rider policy will offer a steady flow of income to family members so that they don’t face any financial difficulties in your absence. Apart from the sum assured, a family gets an additional income per annum up to 5 or 10 years under this rider plan.
6. Waiver of Premium Rider
With this rider, future premiums will be laid off if the policyholder becomes permanently disabled or loses their income because of an injury, accident, or illness before a specified age. For example, if the primary bread earner gets disabled, then the entire family becomes paralyzed. In this scenario, the rider policy acquits policyholders from paying the premium until they resume their work. Without this policy, if the policyholder becomes disabled or loses income, the policy will expire due to non-payment of premiums.
Now you have an adequate idea of the term rider meaning, types, and their benefits. By evaluating the need for specific riders and comparing the cost of different riders from various insurance companies, you can choose the best riders like the term rider in LIC or others that successfully meet all your necessities.