A Kick Start Guide for Life and Term Insurance Riders!

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  | Published: 22 November 2019 | Last Updated On: 08 February 2021

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Any traditional term plan would serve as one of the best safety nets against the uncertainties of life. Any traditional life coverage plan entitles the nominee of the policyholder to obtain the main benefit of the plan, that is, the cover amount or sum assured if the policyholder passes away during the term of the plan.

If in case the policyholder survives the term, they are entitled to get the maturity benefits too. However, a regular term insurance policy does not include the entitlement of maturity benefits. It only includes the death benefit for the nominee or the beneficiary if the insured dies within the term of the policy.

But, the policyholder can always add riders to their plans, which are meant for additional coverage, apart from the main benefits of the plan.

In exchange for the higher premium rates, the policyholder can obtain these additional covers. Now, the question is-

Do you really need these life and term insurance riders?

To make it easier for you to understand, let’s compare these riders with a fast mobile charger. Suppose, you are running late and the battery of your phone is about to die, would a regular slow charger be of any use? Well, honestly it won’t be entirely useless (especially if that is the only option you are stuck with; however, if you have a charger that works quite faster than the regular one.

The answer is obvious; a fast charger would be your preference. The insurance riders work the same way. Just as the fast charger, these additional covers are optional. Your battery gets charged quickly with the fast working charger because of the rise in charging power. In case of insurance, the riders will boost the power of your life cover plan.

Of course, you have the option to buy plain vanilla life insurance with no riders. However, at times, you may, unfortunately, end up suffering a critical illness or permanent disability. How would your dependents manage the monthly expenditure, your children’s education and marriage, home or auto loans, and more?

These are the cases where complete protection for unfortunate or unforeseen events with riders becomes important.

Some Essential Riders for Life and Term Insurance

Here are a few of the additional covers we have been discussing about.

Accidental Death Cover

This additional coverage entitles the beneficiary or nominee of the policyholder to get an extra coverage in addition to the sum assured according to the basic plan. But this rider is applicable only when the insured person passes away because of an accidental occurrence.

Accidental Disability Cover

It is amongst the important insurance riders, which entitles the nominee of the policyholder to receive the extra coverage in addition to the sum assured according to the basic plan. But this rider is applicable only when the insured person becomes disabled because of an accidental occurrence.

Critical Illness Cover

This rider provides the policyholder an option to receive extra cover in case of a critical illness. Hence, critical illness cover acts as an additional protection for providing financial security in case you get diagnosed with a critical illness.

Each insurance company has a pre-determined list of these diseases against which you get protection. In case of any such instance, additional benefits will be paid to the nominee of the insured.  

Waiver of Premium

It is amongst an important term insurance rider, which comes with the feature which entitles the insured and their beneficiary to get the insurance coverage without making payment of premiums in the case of some pre-defined condition or eventuality. Therefore, the coverage remains in effect but the premium balance gets waived off.

Income Cover

This rider entitles the nominee of the policyholder to get a certain amount as a fixed income in case the policyholder dies during the term of the insurance policy.

To Sum Up!

Riders are basically paid benefits that can be added for expanding the scope of the base coverage of your life or term insurance. The plain vanilla life insurance coverage may fail to cover all the needs of you and your family, hence, these riders can be important.