Most Indians are already a step ahead when it comes to buying life insurance for themselves and their family members.
It gives great relief to know that your loved ones will be financially protected in case of your unexpected and premature death. While term insurance is getting popular amongst individuals, most people tend to compromise with the feature of term riders. As a matter of fact, let’s face the truth that people are unaware of the benefits of the riders which are solely meant to increase the level of your protection coverage. In other words, riders make your term insurance plan much more comprehensive to give you overall protection.
Term insurance protects your family financially in the event of your untimely death. However, there may be times when something awful happens to you or you suffer from a critical illness that results in a significant financial loss. For instance, imagine you meet with a serious accident someday. Though you survive in the accident but unfortunately get disabled. This would result in a heavy loss of income as you may not be able to join your office for a very long time or may be ever. Under such a situation, your rider protects you.
These riders are add-ons to your simple term policy that serve as a tool for increasing your protection coverage without having to purchase a separate policy. They can be bought by just paying an extra premium amount which is less than the premium of term insurance. Riders are individual specific and depending on the needs and requirements of policyholders, insurers give an option to policyholders to customize their term plan.
Insurance companies offer several riders such as Critical Illness, Accidental Death and Waiver of Premium with each rider available at a different cost and each offering a different set of benefits. However, one does not need to buy all the riders because as a policyholder, it is very important for you to choose the right riders that make sense for you.
Accidental Death Benefit Rider
In case of death during an accident, the sum assured of the accidental death rider is payable in addition to the normal term insurance death benefit. For instance, if your basic sum assured is 1 crore and you have attached Accidental rider of Rs 25 lakh to your policy, the total claim amount would be Rs 1.25 crore, provided the death occurs due to an accident. As per the report by Union Road Transport, about 400 people get killed every day in road crashes in the country. Speaking about a large number of untimely deaths every day, if you happen to be the only earning member in your family, it is strongly recommended to consider taking this rider. This ADB rider can be availed by just paying Rs 100 - 125 extra per month with your base premium.
Critical Illness Rider
This rider when added to your base insurance plan makes it the most economical way of protecting yourself against major life-threatening diseases. Given the general terms of the Critical Illness Rider, the concerned policyholder is eligible to receive a particular amount of sum assured upon diagnosis of any critical illness such as cancer, heart attack, organ-related diseases, stroke, or other life threatening diseases that are covered in your policy. Having such an illness not only raises your hospital bills but also wrecks your career and disables you from earning. However, buying this rider will not just act as your income replacement but will also help you in managing household expenditures like kid’s education, money spent on hospital visits, house rent, etc.
Waiver of Premium Rider
Any life insurance policy worth buying is also worth keeping. However, there can be circumstances where you become disabled due to an accident or get diagnosed with critical illness leading to the inability to pay future premiums. under any such situation, all your future premiums will be waived off till the end of the term rider. This is why a lot of insurance companies provide waivers of premium riders for policyholders to deal with such emergency situations. The cost of the rider is as low as Rs 30-40 per month for a non-smoking 30-year old male. Although the cost of the rider will vary for each insurer depending on the age and other important factors. This rider is known to be one of the most appealing riders among the policyholders because of its ability to keep the plan active in all such situations.
Accident Disability Benefit Rider
This rider kicks in if the assured becomes permanently disabled due to an accident as all accidents don’t always result in death. If the life assured becomes permanently disabled in an accident, then he/she is paid the sum assured. Therefore, it is always recommended to buy an accidental disability rider along with term insurance with ease of purchase.
The author, Sajja Praveen Chowdary, is Head- Term Life Insurance at Policybazaar.com. The views expressed are personal