A term insurance rider is an added cover that can be chosen with the base term life insurance policy to extend its coverage benefits. The insured can buy a rider by paying an extra premium amount. But why should one buy a rider? It can help one stay better prepared for the unpredictability of life.
Different insurance providers offer different riders under their term insurance plans. Here are the common types of term plan riders and their benefits.
Types of Insurance Riders
Accidental Death Benefit Rider
It offers an additional sum assured in the event of an unfortunate demise of the insured in an accident. The amount is calculated as per the original sum assured, and therefore, can vary from one insurer to another. The premium is fixed for the whole term. But some plans put a limit on the maximum sum assured that can be received.
Accidental Disability Benefit Rider
If the policyholder becomes partially or permanently disabled due to an accident, he/she can benefit from this rider. Usually, you can be paid for 5-10 years after the particular accident. Sometimes, together with an accidental death rider, this rider can become an income source.
Critical Illness Benefit Rider
It offers a lump sum amount if the policyholder is diagnosed with one of the critical illnesses listed in the policy documents. You are usually covered for a major organ transplant, heart attack, kidney failure, paralysis, stroke and cancer among others. The term life insurance policy can be continued or ended after diagnosis of a critical health condition based on the policy’s terms and conditions.
Accelerated Death Benefit Rider
The family of a policyholder suffering from a terminal condition like asthma, cancer, lung damage or kidney failure, has to pay a hefty amount for medical costs incurred during the treatment. However, the beneficiary gets a part of the sum assured in advance with this rider. This can help in challenging times.
Waiver of Premium Rider
It waives off the future premiums if the insured cannot pay them because of loss of income or disability. If this rider is not chosen and the policyholder can’t pay the needed premiums, the policy would expire and no death benefit would be available.
Child Support Benefit Rider
It pays an extra sum assured to a dependent child on the demise of the parents (insured). The aim is to meet the kid’s needs after the death of the parent. Therefore, the child can achieve various milestones without compromising on any goals due to financial constraints.
Income Benefit Rider
In the case of the death of the policyholder, this rider pays the insured’s family an additional amount annually along with the regular sum assured. This is available for 5-10 years and acts as a source of income.
Choose a suitable term policy rider based on your requirements. Remember to use an online premium calculator on the website of the chosen insurance provider. It can show you the additional premium amount you need to pay for the chosen rider.