A pure term life insurance policy provides lump-sum payments or payouts in the form of monthly installments to the nominee in the event of the policyholder's death during the policy term. If the policyholder lives longer than the policy period, there are no maturity benefits. The advantages of a pure term life insurance coverage are as follows:
· Offers the sum assured if the policyholder dies
· Low annual, half-yearly, quarterly, and monthly premiums
· High Life Cover
Generally, there is always hope for a single insurance plan to offer additional benefits in addition to its primary services (in this case, death benefit). Still, even if we learn of a term plan with added advantages, we decline it because we assume it would be costly. However, this is incorrect. The fact is that Term Life Insurance riders are those additional benefits that can make a term plan comprehensive with just a little extra money.
What Are Riders? How Can They Enhance The Scope of Pure Term Insurance?
A term life insurance rider is an addition or modification to an insurance policy that extends the protection the policy provides. For instance, if you can no longer pay the premiums owing to an accident, a waiver of premium rider will let you retain your term life insurance coverage.
Riders come with the majority of term life insurance policies. However, depending on the term plan, the premium, and the provider, different riders have different terms and conditions. Some riders are already included in the term insurance policy, but some must be purchased separately and at an additional cost to be covered by the policy. Check online or ask the insurance agent or advisor about the riders your policy is eligible for while buying term life insurance.
What are the various kinds of Riders available?
Accidental Death Rider
This rider provides an additional sum assured if the insured dies due to an accident during the policy period. According to the initial sum assured, a proportion of this additional amount is determined and may vary as per the insurance provider you choose. In some rare circumstances, the maximum sum assured by this rider may be capped. For the duration of the policy term, the premium for this rider does not change.
Please note that the basic sum assured will still be paid in case of accidental death, even if this rider is not included. The difference that the inclusion of this rider makes is that it guarantees an additional lump sum amount If the policyholder meets an untimely death due to an accident, in addition to the basic sum assured under the policy.
This rider should be taken by individuals who operate in hazardous environments or travel extensively for work-related activities. At a reasonably low price, it provides a substantial cover.
Accelerated Death Benefit Rider
When a person is diagnosed with a terminal disease, the grief-stricken family must pay a significant amount for the patient's medical care and other related expenses. In such a scenario, the patient's family receives a portion of the sum assured in advance if they have the accelerated death benefit rider. This proves to be crucial during those days.
The amount of the sum assured that would be paid in advance is specified in this rider. Therefore, the Accelerated Death Benefit Rider is a beneficial rider that is reasonably priced.
Accidental Permanent Total/Partial Disability Rider
This rider takes effect if the policyholder is involved in an accident and consequently suffers a permanent or partial disability. With the addition of this rider, the majority of policies pay the affected policyholder an amount equal to the sum assured in a lump sum or monthly installments (as opted by the policyholder) after the accident-caused disability. This rider and the Accidental Death rider are frequently combined.
It is possible to rely on this rider as a source of revenue. However, it's vital to remember that this restriction only applies if the disability was brought on by accident. The precise terms and conditions are outlined in the policy document.
Critical Illness Rider
When a serious illness covered under the policy is diagnosed, the policyholder is given a lump sum payout thanks to this rider. Most serious illnesses, including cancer, heart disease, stroke, paralysis, coronary artery bypass surgery, kidney failure, major organ transplant, etc., are covered by critical illness insurance.
The insurance may either continue or terminate after the illness is discovered in accordance with the terms and conditions of the policy. In the event of a diagnosis, the insurer will disburse the benefits covered by the rider in a lump sum. Even after the rider benefits are paid out, the basic cover will stay in effect.
To fully comprehend the specific terms and conditions related to this rider, it is advised to read the policy document.
Waiver of Premium Rider
With this rider, the insurer will not charge future premiums if the policyholder cannot pay the same due to a loss of income or a disability. The fact that the policy remains in effect is the most crucial part of this add-on. With this rider, your total premium payment is guaranteed until the end of the policy.
Without this rider, the policy would expire, and no death benefit will be paid if the policyholder experiences a disability or income loss, making it impossible to pay the premiums.
Income Benefit Rider
The purpose of this add-on is to generate money after the policyholder's death. As a result, the insured's family receives additional income (a percentage of the sum assured) monthly, in addition to the sum assured, for a predetermined period of time when this rider is included in the policy.
How to Choose the Right Riders For your Plan?
Before adding riders to your policy, thoroughly study them and their related benefits, all inclusions and exclusions, and evaluate the various prices of various riders offered by multiple insurance providers. A term insurance calculator can determine these prices and help you compare different plans.
Given the scenarios mentioned above, some of these riders may be required for you. Even though we cannot control unforeseen events, we can plan for them. You and your family would benefit immensely from the presence of term life insurance riders because they are a crucial component of contingency planning.
When you can easily get term plan riders by spending a little extra, why compromise with your loved ones? Instead, give them a chance to retain comprehensive financial security by adding relevant riders to your term life insurance.
