The COVID-19 pandemic has made everyone realise that life is fleeting. It is, therefore, vital to plan your finances for such a crisis situation.
If you want to secure the future of your loved ones and ensure that they are well taken care of even if you are not around, then term insurance might just be the solution for you. On choosing a term policy, a critical component is also selecting the relevant ‘riders’.
Meaning of ‘Riders’ in a Term Insurance Plan
Riders are additions made to the existing term insurance plan to expand the scope of the insurance plan. They are add-ons that help the person insure himself of certain contingencies that are not covered under the term policy. The insurance companies offer various types of riders from which a person can choose as per requirements. These riders will alter the premium amount. You can estimate that premium using the term insurance premium calculator.
Types of Term Insurance Riders
- Critical Illness Rider
A critical illness rider gives you an additional pay-out over and above the death benefit cover in the term insurance policy. If an insured person is diagnosed with any critical illness specified in the policy, such serious ailments would render you unable to go to work, and this rider can compensate for your loss of income.
These critical illnesses are generally covered under this rider:
- Cancer of Speciality Severity
- First Heart Attack of Specified Severity
- Open Chest CABG
- Stroke resulting in Permanent Symptoms
- Kidney Failure Needing Regular Dialysis
- Multiple Sclerosis with Persisting Symptoms
- Major Organ/Bone Marrow Transplant
- Permanent Paralysis of Limbs
- Alzheimer’s Disease
- Primary Pulmonary Hypertension
- Aortic Surgery
- Reconstructive Breast Surgery (Only for Female Life)
- Waiver of Premium Rider
Another cost-effective rider is a ‘waiver of premium’. It provides you with a benefit of not surrendering the policy if you fail to pay the insurance premium due to disability or a critical illness. This rider ensures that the premium payment is made on your behalf for your policy till its expiry. In the absence of this rider, when you do not make the payment, the term policy will lapse, and you will also not get the death benefit assigned in the original policy.
- Accidental Death Rider
An accidental death rider, as the name suggests, provides coverage in case of death due to an accident. Here, the nominee is entitled to receive the original death benefit as per the term policy along with additional benefit as mentioned in the rider. Due to the increase in the number of road accidents and untimely deaths, you can get yourself secured on these contingencies to ensure a secure future for your dependents.
- Accidental Disability Rider
This rider covers a person in case of a permanent/partial disability due to an accident.
This chart shows how much compensation a person receives in the event of permanent/partial disability under accidental disability rider:
|If the disability is partial||The amount receivable will be 50% of the rider sum assured|
|If an accidental permanent partial disability benefit has already been received earlier and if the disability is permanent within one year from the previous occurrence||The amount receivable will be 50% of the rider sum assured|
|If an accidental permanent partial disability benefit has already been received earlier and if the disability is permanent after one year from the previous occurrence||The amount receivable will be 100% of the rider sum assured, and the rider will terminate thereafter|
|If the disability is total||The amount receivable will be 100% of the rider sum assured, and the rider will terminate thereafter|
Insurance plans help secure your life in case of unfortunate events. Adding additional riders will increase the scope of your insurance plans, which requires developing a more profound and better-rounded understanding of term insurance riders. These riders can additionally safeguard you in a certain contingency that is not covered in the standard term policy and help protect the future of your family and loved ones.