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Is it worth opting for a rider while buying term insurance?
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Is it worth opting for a rider while buying term insurance?

Purchasing a term protection plan is one of the most brilliant methods to financially secure your family’s future in your absence. Term insurance offers a substantial amount as a life cover at a small premium. You need to pick policy tenure, cover amount, and add-on benefits as riders, which you can choose by paying an additional premium. A term insurance rider provides an extra advantage that expands the scope of your base coverage. Riders provide insured with different coverage options while protecting them from other uncertainties in life. They can be bought along with the base policy and some also come as an in-built option in specific term insurance policies.

To understand riders in a better way, let’s know their benefits before you choose to buy a term insurance rider.

Advantages of Term Insurance Riders 

Here is a rundown of advantages that you get on buying a term protection rider:

  1. Upgraded Cover
  2. Better Protection
  3. Minimum Hassle to manage

 

1. Upgraded Cover

Adding riders to your base policy increases your insurance coverage level. This is a significant advantage of riders, as in several cases like long hospitalization, accidental deaths, high medical expenses might result in death. In such a case, your family will require much more funds than simply the death claim to take care of everything.

2. Better Protection

The primary reason behind adding a rider to your term insurance plan is that you need your family to be protected from more than one danger. Death is without a doubt is a definitive reason for a family’s monetary hardships at the same time; accidental disability, hazardous disease, with costly medicines are likewise similarly crushing, if not more. Therefore, adding riders to your term insurance policy absolutely adds more benefits to it and ensures your family is better.

3. Minimum Hassle to manage

Riders work alongside the base life cover. In any case, if you somehow happened to purchase separate critical insurance or accidental cover, you will be required to pay more premium and more than one term insurance to manage, which can be unmanageable. One more downside of purchasing separate covers is that joined advantages won’t be available. Therefore, as riders come along with your base policy, they are easy to manage and come as affordable as buying separate policies.

Now let’s take a glance at some of the famous riders that accompany a term insurance plan.

Different types of Term Insurance Riders

  1. Critical Illness Rider
  2. Premium Waiver Rider
  3. Accidental Death Benefit Rider
  4. Partial and Permanent Disability
  5. Income Benefit

 

1. Critical Illness Rider

The advantages of this rider comes into play when someone gets diagnosed with a critical illness within the policy tenure. A predefined single amount is paid out on the analysis of such disease. The rundown of critical illnesses covered under a policy is mentioned in the policy document, which you should check at the time of buying the term insurance policy.

2. Premium Waiver Rider

Assuming you have had an accidental disability or critical illness, then this term insurance riders will keep this policy active thereby covering these risks. For instance, due to accidental disability, this rider guarantees that the term insurance policy remains active even if the policyholder is not able to pay the premiums.

3. Accidental Death Benefit Rider

This rider provides an additional amount as a death benefit to the insured’s dependents in case of the life assured accidental death. However, the reason for death should be among the reasons covered by the rider for the rider benefit to be paid.

4. Partial and Permanent Disability

In case of partial and permanent disability, this rider provides a regular flow of income in the form of a staggered payment. The thought is to cover any loss of income because of the disability of the insured incapacity of the safeguarded. The amount is generally a percentage of the total sum assured.

5. Income Benefit

Income benefit rider provides regular income to the insured’s family in case of the sudden demise of the policyholder. The payment is made as the percentage of the sum assured for a term of 5 to 10 years over and above the sum assured payment.

The bottom line is a term insurance rider provides an extra protection cover that you can add to your base policy. However, while the riders give a few advantages, please don’t add them to your life coverage without understanding their benefits vis-à-vis your requirements. Riders ought to be purchased carefully with an appropriate explanation. They should ideally take care of an issue as opposed to adding an additional expense. One can choose extra riders based on their necessity. Term insurance riders add more stars to all your security evaluations of your fundamental term life coverage plan. So, think through whether you require any rider or not and then opt for the right one.

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