Term Insurance
Riders
  • Types of Term Insurance Riders
  • Add-on Rider Benefits
  • Who Should Opt for?
Term Insurance Riders
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Term Insurance Riders: All You Need To Know

A term insurance policy is a type of life insurance product designed to secure the future of your family financially in your absence. These plans offer wide coverage at very low premiums as well as offering buyers the flexibility to customize basic term plans to increase their effectiveness by adding the right term insurance riders at minimal premiums.

Buying a term plan with add-on riders will be beneficial for the insured person in the long run. Each insurer offers various term insurance riders with their term plans. Apart from the base plan benefits, you can add these optional in-built riders to your term plan to enhance coverage for specific and pre-defined conditions.

Stay tuned with us to learn more about what term insurance riders are and the different types available in India.

What are Term Insurance Riders

Term rider is an optional add-on rider that can be added to the to enhance the plan's coverage and provide additional financial support to beneficiaries beyond the base policy. It's up to the policyholder whether they want to customize their base plans with riders.

However, you can add riders to your base plan at nominal extra costs paid with the base premium amount.

These term insurance riders provide additional financial support to the nominee beyond the base plan if an uncertain event occurs, such as an accidental death, disability, or diagnosis of a critical or terminal illness.

For instance,

  • Varun, aged 35, is a web designer with one child, aged 6, and a 34-year-old housewife, Leela.
  • Varun had an unfortunate death in a car accident, but he was holding a term plan of INR 1 crore along with an accidental death benefit rider of ₹ 40 Lakhs.
  • After his demise, Leela got Rs 1 crore as the death benefit as well as an additional amount of ₹ 40 lakhs as Varun's death was due to a car accident and he had added an accidental death benefit rider to his term plan.

What are the Different Types of Term Insurance Riders in India?

Here, we've listed all the available term insurance riders that you can add to the base plan to enhance term plan benefits:

  1. Accidental Death Benefit Rider

    With Accidental Death Benefit Rider, your nominee will receive enhanced coverage in case the insured person dies due to an accident.

    For instance, Bhanu bought a term insurance plan with a base cover of Rs. 1 Crore and added an accidental death benefit rider in their base plan for Rs. 50 Lacs.

    If Bhanu had an unfortunate death due to an accident throughout the policy term, their nominee would get the death benefit of Rs. 2.5 Crore on the death of Bhanu.

  2. Accidental Total and Permanent Disability Rider

    The ATPD rider is an essential term insurance rider for those who work in a risky environment. It offers financial protection to the insured if they suffer a total or permanent disability due to an accident during the policy tenure. You can choose to get a life cover as a lump-sum payment or regular payment throughout 5 to 10 years to compensate for the loss of income due to disability.

  3. Critical Illness Rider

    With a critical illness rider, you can claim your life cover while you're still alive in case you are diagnosed with a listed critical disease. You can use that claimed amount to pay for medical treatment expenses such as doctor and hospital visits, prescriptions, medicines, hospital rooms, crutches, wheelchairs, Etc.

  4. Waiver of Premium Rider

    A waiver of premium rider is an optional add-on that waives off the remaining premiums in case the insured person becomes critically ill or physically disabled. It is an ideal way to prevent the burden of premium payment during tough times, such as job loss due to a disability or a critical illness. The rider waives off premiums after 180 days.

  5. Income Benefit Rider

    ith Income Benefit Rider, you can ensure that your family gets a substitute for the income loss due to the policyholder's unfortunate demise. It provides the policyholder's family with regular installments of the death benefit for a fixed period. Generally, monthly installments equal 1% of the add-on cover sum assured, payable in the event of the policyholder's demise.

  6. Terminal Illness Rider

    A terminal Illness Rider is often referred to as an accelerated death benefit rider. It allows the policyholder to claim the entire or some portion of the death benefit while they're still alive if they're diagnosed with a terminal illness. Please note that to claim a death benefit, you must provide doctor reports stating that your life expectancy is assumed to be less than 12 months.

Other Term Insurance Riders

What are the Term Rider Benefits

Here are some of the reasons why term insurance riders are important:

  • In-built optional add-ons cover enhances your overall base coverage by offering protection against unforeseen circumstances.
  • Buying separate policies for different needs can be expensive, but you can customize your base plan to fit all your requirements by adding term insurance riders.
  • Term insurance plan add-on cover tenure cannot exceed the policy's term.
  • Term insurance riders can only be added while purchasing a plan.
  • Premiums paid towards term insurance riders are eligible for tax benefits under Section 80C of the Income Tax Act. This helps in reducing the overall tax liability of the policyholder.

Who Should Opt for a Rider While Buying a Term Insurance Plan?

Anyone who wants to enhance the overall base coverage in a term plan can add riders to it. Based on your financial goals, you may consider which add-on rider best suits you, and that will benefit you in the long run.

Term Insurance RiderEligible Policyholder
Accidental Death Benefit Frequent traveler
Workers of high-risk industry
People working in mining
Construction/manufacturing worker
Accidental Disability BenefitOn-road jobs
Workers of high-risk industry
Mining workers
Construction/Manufacturing workers
Critical Illness Benefit People who consumes Alcohol, Tobacco
Chain-smokers
People with critical illness in family history
Income BenefitFinancial Dependant of any sort
Terminal IllnessA person with a possibility of being diagnosed with a life-threatening disease.
Waiver of PremiumA person with children and dependents who wish to guarantee that the policy continues even if they become disabled or are unable to pay premiums.

Factors To Consider Before Buying Term Insurance Riders

Before buying term insurance riders, it is important to consider certain factors to ensure that the riders offer the necessary coverage and benefits as per the policyholder's requirements. Here are some of the factors to consider before buying term riders:

  • Personal Needs The first and foremost factor to consider is the policyholder's personal needs. The policyholder should evaluate their current financial situation, family size, and the potential risks that they or their family may face in the future.
  • Affordability The policyholder should evaluate the cost of the rider and whether it fits within their budget. The cost of the rider should not outweigh the benefits that it provides.
  • Level of Coverage The policyholder should determine the level of coverage that they need and whether the rider provides the necessary coverage.
  • Duration of Coverage The policyholder should consider the duration of the rider and whether it aligns with their long-term goals and plans.
  • Medical History Some riders may require the policyholder to undergo a medical examination or disclose their medical history. The policyholder should consider this factor before choosing the rider.
  • Claim Process The policyholder should evaluate the claim process of the rider and ensure that it is hassle-free and easy to follow.
  • Insurance Company's Reputation The policyholder should consider the reputation of the term insurance company and whether they have a good track record of settling claims.

Conclusion

Adding a suitable term insurance rider is the same as buying a term plan. You must thoroughly assess your needs and future goals to opt for one that best suits you. So compare various term insurance plans from different insurers. Because in the end, it's always best to know what your insurer has to offer so you can avail yourself of the best deal.

Term Insurance Riders: FAQs

1. Can I add multiple riders to the base term insurance plan?

Yes, you can add multiple riders to the base term insurance plan by paying an extra amount on the premium to purchase the rider.

2. Do term insurance rider premiums differ from the base plan?

Yes, term riders are separate from the base plan and the insured has to pay an extra amount on the base premium to purchase the policy.

3. Can the individual remove or modify the riders in term insurance?

Generally, the riders can't be modified or removed from the term insurance plan, they are fixed. So before purchasing the rider kindly check the policy term and exclusions.

4. Can we add riders to the existing plan?

Yes, you can add riders to the existing plan, and riders are added at the time of inception or at the renewal of the plan.

5. Are there any riders for pre-existing diseases?

Yes, the insurance companies provide riders for pre-existing diseases named Critical Illness Benefit Riders.

6. Is there a limit to how long term insurance riders can last?

Yes, term insurance riders cannot exced the term of the base policy. They end when the base policy expires.

7. What factors should I consider before adding term insurance riders?

Factors to consider include personal neds, affordability, the level and duration of coverage, medical history, the claim process, and the reputation of the insurance company.

Term Insurance Companies

Check and compare plans from 21 IRDAI-approved term insurance providers before purchasing a term plan.

What Our Customers Have to Say

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Sanjeev

Hyderabad

May 20, 2024

SUD Life term plan truly stands out my expectations as I got SUD Life term plan along with additional riders at very affordable premiums.

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Sumit

Coimbatore

May 20, 2024

I am impresses with the hassle free and quick claim settlement process of SUD Life. Thanks to PolicyX who guided me to get my claim settled.

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Barkha

Delhi

May 20, 2024

Bought SUD Life Family Income Benefit Rider plan to secure the future of my plan financially even in my absence.

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Geetanjali

Kolkata

May 20, 2024

I was looking for a term plan to secure the future of my family. So I contacted PolicyX and one of their representatives Mr. Vaibhav helped me choose SUD Life term plan.

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Armaan khan

Agra

May 17, 2024

I recently purchased a Pramerica term insurance policy from Policyx.com. The customer service team was very helpful in answering all my queries and guiding me through the application process. I...

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Rahul Yadav

Indore

May 17, 2024

PolicyX’s dedicated support made renewing my Bandhan Life Insurance policy easy. I’m absolutely delighted with the service offered by PolicyX Insurance Advisor.

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Priyanshu Sharma

Delhi

May 17, 2024

I bought a Bandhan Life Insurance through PolicyX, and I must say the level of communication and assistance I have received has been truly impressive.

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Yash Tomar

Bhopal

May 17, 2024

After getting advice from the PolicyX experts, I chose a Bandhan Life Insurance term plan. Thank you, PolicyX, for helping me buy a term plan at such a low premium.

Sahil Singh Kathait

Written By: Sahil Singh Kathait

Sahil is a passionate content writer with over two years of expertise in the insurance domain. He uses his knowledge in the field to create engaging content that the customer can relate to and understand. His passion lies in simplifying insurance terminology, ensuring a hassle-free understanding for potential policyholders. With his outstanding collaborative efforts with people, he understands different perspectives and keeps readers' viewpoints at the forefront of his content writing approach.