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Here's how you can Enhance your Coverage with Term Insurance Riders

By PolicyBazaar

Buy a term plan and secure your family

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A term insurance plan is an integral part of personal financial planning for everyone. Insurance plans are tools that are indispensable in order to provide financial cushioning to your family and loved ones. Conventional term insurance plans are pure risk protection tools that are highly suitable for countering strokes of uncertainties. These plans help the policyholder to tackle numerous needs while walking on the uncertain trail of life. Apart from providing financial security to the family members of the applicant term insurance plans serve a variety of other purposes such as accumulating wealth, building a corpus, offering peace of mind and a feeling of financial security. 

While looking for term insurance plans in the UAE, we come across add-on riders. The term ‘rider’ may be defined as an additional benefit over the basic coverage of the plan opted with the objective of customizing the protection offered by the plan. If you are looking forward to getting a term insurance plan in the UAE to hedge against uncertainties you should consider getting add-on riders to ensure that you extract the maximum out of the plan. Very often insurance seekers are stuck on the dilemma of choosing the right add-on riders so that they can enhance the protection offered by their term insurance plan. However with a wide variety of term riders available in the UAE insurance its becomes a baffling task, hence in this thread, we’ll be providing a detailed insight on how you can enhance the coverage of the term insurance plan in the UAE via add-on riders. 

Important Factors to Consider

Typically the average cost of term riders is 5 to 10% of the base policy. In order to maximize the protection provided the basic plan; insurance seekers should purchase term riders at the time of issuance of the policy. When insurance riders are purchased at the time of policy inception they cost is lesser in comparison to purchases made after the inception of the family. The basic purpose of buying additional riders is to get more than what the basic term insurance is supposed to offer. Some of the most common term riders are personal accident riders, temporary/permanent disability rider, and critical illness rider.

Making the Choice: Stand Alone Term Insurance or Add-on Riders?

While browsing the internet for the best term insurance plan and riders you may have come across covers with critical illness and personal accident coverage in the form of a standalone policy and rider both. However, it should always be kept in mind that add-on term riders are less expensive in comparison to standalone term insurance plans.

After closely looking at the economic aspect and the protection quotient insurance seekers are confused about whether to go for add-on term rider or a standalone term insurance plan. The choice here depends on the requirement of the buyer. If the insurance seeker is looking for a specific type of coverage for a limited period then add-on term rider is the right choice to make. Contrary to this if you are looking for comprehensive protection for your dependents for a relatively long time frame, in that case, the standalone term insurance plan is the ideal choice. 

Types of Term Riders and their Utility

There are numerous term riders available over the basic term insurance plan, here’s a quick rundown:  

Rider Description

Accidental Death benefit

Out of all the insurance riders, this is one of the most common and least inexpensive term riders. If the policyholder passes away due to an accident a death benefit is paid to the nominee of the term insurance plan.

Critical Illness Benefit Rider

The critical Illness benefit rider is another popular term rider that is extremely useful in case of any critical illness. Insurance providers have a list of ailments that are considered as critical illnesses. If the policyholder is diagnosed any of the diseases the provider pays an additional benefit over the basic coverage to the nominee of the plan.

Waiver of Premium Rider

This rider is a beneficial one as it safeguards and protects the policyholder during the phases of financial hardships. This term rider overrules the requirement of making consistent payments in case of loss of income due to disability or any other reason. The rider ensures that the coverage is continued without payment of premium.

Accelerated Death Benefit Rider

This is a unique rider that allows policyholders to make use of their coverage when diagnosed with terminal illness. In such a scenario the policyholder can advance coverage up to 40% of the total death benefit of the term insurance plan. The amount paid initially in the form of accelerated death benefit will eventually be deducted from the total coverage that is to be received by the nominee.

Temporary or Permanent Disability Rider

Policyholder might encounter situation that cause temporary or permanent disability due to accidents or any other medical condition. By making use of this rider the policyholder and their family can receive steady flow of cash.

Long Term Care Rider

This rider turns out to be useful in case the policyholder is bedridden due to bad health. The long term care rider provides monthly payment for proper medical assistance and treatment of the policyholder.

Income Benefit Rider

In case of any unfortunate event leading to the demise of the policyholder the income benefit rider provides steady flow of cash to family members.

In a Nutshell

Riders are additional benefits that can be added to the policy in order to increase the protection quotient of the basic term plan. Before you go ahead and purchase a term insurance plan with add-on riders it is highly recommended that you indulge yourself in some thorough market research and analysis to understand the functionality of riders. Furthermore, before you add a term rider into your plan assess your requirement and ask yourself, do you actually need the coverage?

It is not permissible to modify life/term insurance plans, but with the right rider in place, you can transform the plan and gain control over the dynamic situations in life.