Term insurance plans are immensely useful for most families. Given how unpredictable life is and how more and more people are getting vulnerable to various lifestyle diseases, term insurance acts as a financial safeguard. However, you can always boost the scope of overall coverage by adding riders or add-ons to your plan. Which ones should you choose?
Here’s a look at some of the riders you can consider.
What are the Standard Riders Available with Term Insurance Plans?
Here are some riders that are commonly offered to those purchasing term plans:
Accidental Death—This is a key rider that enables extra financial coverage if the policyholder’s unfortunate demise is due to an accident (within a specified period after the accident). It provides coverage over and above the base life coverage, widening the financial safety net for your loved ones.
Partial and Permanent Disability—If the policyholder suffers from a permanent or partial disability due to any mishap, this rider enables financial protection for them and their family members. Depending on the policy terms, it may offer a lump sum payout or income replacement, helping cover the lost income of the primary earning member.
Critical Illness – Suppose you are diagnosed with a critical illness down the line, this rider provides a lump sum payout upon diagnosis of a covered illness. This amount can be used to cover medical bills, lost income, or any other expenses.
Premium Waiver – In case the policyholder has a disability or is diagnosed with a critical or terminal illness and cannot work any longer, the insurance company will waive future premiums. This means that your policy will stay intact even if you are unable to continue paying.
Terminal Illness – If the policyholder is diagnosed with a terminal illness, the insurer pays a portion or the full sum assured in advance. This helps cover income losses, health costs, and other needs.
Income Benefit – This rider provides the nominee with a predetermined portion of the coverage amount in the form of a fixed income if the policyholder passes away during the policy term. It can act as an income replacement option for the family.
Conclusion: Boost Your Term Plan with Suitable Riders
Term insurance riders have several advantages worth noting. They can enhance the overall sum assured and offer additional coverage that comes in handy during emergency situations. Families can be financially secured against various uncertainties, including critical/terminal illnesses, disabilities, or accidental deaths of breadwinners.
Most riders are affordable and only require a nominal additional premium over the regular term insurance premium, although costs may vary depending on factors such as age and health. Separate coverage can be significantly costlier. Riders also offer tax benefits, with deductions available under Section 80C for life insurance premiums and under Section 80D for critical and health-related riders, subject to prescribed conditions. Thus, while purchasing your term plan, check the available riders carefully and choose the ones that suit your needs.