All About Term Insurance Riders

Term insurance is a type of life insurance policy that provides coverage for a specific term or period. It offers a death benefit to the beneficiary in case the policyholder passes away during the policy term. While term insurance provides basic coverage, riders can be added to the policy to enhance its benefits and customize it according to the policyholder's specific needs. In this article we will get to know what is a term insurance rider, why one should opt for it, what are the benefits and a lot more.

What Are Riders in Term Insurance?

Term rider means an optional add-on that can be added to the policy to enhance its coverage and provide additional benefits to the policyholder or the beneficiary. Riders are add-on features that come with an additional cost, and they can be customized to meet the policyholder's specific needs.

There are various riders available in term insurance policies that offer additional benefits to the policyholder or the beneficiary. Here are some of the most common riders in term insurance:

• Accidental Death Benefit Rider : This rider pays an additional benefit to the nominee in case of the policyholder's accidental death.
• Critical Illness Rider : This rider provides coverage against specific critical illnesses like cancer, heart attack, or stroke, and pays a lump sum amount in case of a diagnosis.
• Term Insurance With Accidental Disability Rider : This rider provides a monthly income to the policyholder in case of permanent disability due to an accident or illness.
• Waiver of Premium Rider : This rider waives off future premium payments in case the policyholder becomes permanently disabled or is diagnosed with a critical illness.
• Income Benefit Rider : This rider provides regular income to the nominee in addition to the death benefit in case of the policyholder's death.
• Terminal Illness Rider : This rider provides a lump sum amount in case the policyholder is diagnosed with a terminal illness and has a life expectancy of fewer than 12 months.
• Term Conversion Rider : This rider allows the policyholder to convert the term insurance policy into a permanent life insurance policy without undergoing a medical examination

Adding riders to a term insurance policy can increase the overall cost of the policy, but they provide additional protection against unforeseen circumstances. It is important to evaluate the cost-benefit of each rider before adding them to the policy.

Term Insurance Companies

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

Importance and Benefits of Term Rider

Term riders are important because they provide additional benefits and coverage to the policyholder or the beneficiary. They can enhance the overall coverage of the policy and offer additional protection against unforeseen circumstances. Here are some of the reasons why term insurance riders are important:

• Customized coverage : Term insurance riders can be customized to meet the specific needs of the policyholder. This ensures that the policyholder gets comprehensive coverage that meets their individual requirements.
• Additional protection : Riders offer additional protection to the policyholder and their loved ones against unexpected events like accidents, critical illnesses, and disabilities.
• Cost-effective : Riders are a cost-effective way to enhance the coverage of the term insurance policy. They offer additional benefits at an affordable premium.
• Peace of mind : Adding riders to a term insurance policy provides peace of mind, knowing that the policyholder and their loved ones are protected against unforeseen circumstances.
• Tax benefits : 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.
• Flexibility : Riders offer flexibility to the policyholder to add or remove them as per their needs and requirements.
• Peace of mind : Adding riders to a term insurance policy provides peace of mind, knowing that the policyholder and their loved ones are protected against unforeseen circumstances.

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 insurance company and whether they have a good track record of settling claims.

Conclusion

In conclusion, riders in term insurance policies offer a range of benefits to the policyholder or the beneficiary. They provide additional coverage, customization, and flexibility to meet the specific needs of the policyholder. Riders are a cost-effective way to enhance the coverage of the term insurance policy, and they come with tax benefits as well. As discussed above, there are various riders available in term insurance policies, it is important to evaluate the need for each rider before adding them to the policy to ensure that the policyholder gets the best coverage at an affordable premium. With the right set of riders, a term insurance policy can provide comprehensive coverage and protection to the policyholder and their loved ones against unforeseen circumstances.