Term insurance is one of the most popular forms of insurance availed by Indians. These insurance plans are usually aimed at providing insurance protection to your family in case of unfortunate and unforeseen circumstances. Term insurance is a good option for people who wish to lead a stress-free life with respect to their families.
Availing a separate rider with your term insurance policy may marginally increase your insurance premium. The increase depends upon the type of rider availed by you. Addition of these riders is not linked to the base insurance policy in any way. The best way to choose these riders is to first realize your future financial need and then zero down on the rider that suits your financial requirement the best. Different insurance providers offer various kinds of riders for various financial needs. The additional cost of these riders depends upon the life insurance company from which you have availed your insurance.
Riders for Term Insurance
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Riders are one of the foremost distinguishing features of term insurance. These riders offer additional protection and coverage via payment of a marginally higher premium. Any term insurance rider can be understood as an amendment to the actual term insurance policy. Riders are available for various purposes and can be chosen and attached to the base policy to reap extended benefits out of your term insurance policy.
Types of Riders for Term Insurance
Listed below are some of the most important riders that are available for almost all kinds of insurance policies offered by insurance providers in India.
Waiver of Premium
Waiver of premium is an excellent rider for safeguarding policy holders against policy lapse in case of non-payment of insurance premiums. Most insurance policies cease to be active in case you are unable to pay premiums for a specific period of time. This non-payment of premiums may arise out of financial situations like joblessness etc. Waiver of premium rider ensures that your policy remains in force even if you are unable to pay your premiums. The effect of this rider would be waiving off of all your future premiums but continuation of policy benefits.
Expenses made towards any critical illness can amount to a major chunk of the expense incurred by any individual. Hence, a critical illness rider goes a long way in shielding policyholders from any major medical expense and also makes sure that medical attention is not delayed or ignored due to lack of financial resources. Generally critical illness riders extend medical coverage for illnesses like heart attack, stroke, cancer, kidney failure, paralysis and certain other illnesses. The rider helps policyholders avail a certain pre-decided lump-sum amount as soon as any of the above listed critical illnesses are diagnosed. The base term insurance policy may continue its coverage or may terminate depending upon the terms and conditions of the insurance policy. This is generally dependent on the insurance provider who is offering the policy.
This rider is best suited to individuals who wish to leave their families a substantial sum of money in case of sudden accidental death. Since, accidental death may involve higher medical expenses and unfulfilled financial liabilities, the accidental death rider offers extra payment to your family in case of death due to accident. The basic sum assured applicable on term insurance will still be paid even if this rider is not availed by the policyholder.
Partial and Permanent Disability
There may be times that policyholder may suffer from partial or permanent disability due to accident. In such cases, the partial and permanent disability rider offers staggered payments which are a percentage of the total sum assured of the insurance policy. Most policies offer 10% or more of the sum assured each year to the individual or his/her family. This is done in order to compensate for the loss of regular income that may arise due to partial or permanent disability of the policyholder.
Income Benefit Rider
This rider offers benefit to the insurance holder’s family in case of his/her sudden death. The aim of this rider is to act as a regular income source for the family of the deceased policyholder. Payment is generally made as some percentage of the total sum assured and this acts as supplementary income for dependents.
Reading about the above few riders, it is clear that riders are a great financial tool to help you plan wisely for unfortunate and unforeseen events of your life. These events may not necessarily occur in every individual’s life but nonetheless, planning for them is the best strategy to keep oneself and one’s family protected at all times and under all circumstances.